Case: UNION OF INDIA &amp; OTHERS Vs. BHARAT FORGE LTD. &amp; ANOTHER

out wherein the HSN code is indicated, they are tenders issued by the other units of the Indian Railways. Since the first appellant is the Union of India, we would expect that if it is otherwise permissible to sustain the impugned judgment, it may not be fair to not have a uniform policy in the matter of award of largesse by the various units under it. However, the appellants do point out that even in the tenders which have been brought out, the HSN Code mentioned in the tender is shown as indicative only. It has been provided in the tenders relied upon by the writ petitioner that it will be the responsibility of the bidder to quote the correct HSN Code and the corresponding GST rate while submitting the offer. We may notice the relevant clause: A. 1. HSN number mentioned in tender 8504 is indicative only. It will be responsibility of the bidders to quote correct HSN number and corresponding GST rate while submitting offer. 2. Even if bidders quote different GST rates in offers, the offers shall be evaluated by IREP3 system based on the GST rate as quoted by each bidder and same will be used for determining the inter se ranking. Bidders may note that I. It shall be the responsibility of the bidder to ensure that they quote correct GST code and HSN number. II. Purchaser shall not be responsible for any misclassification of HSN number or incorrect GST rate if quoted by the bidder. III. Wherever the successful bidder invoices the goods GST rate of HSN number which is different from that incorporated in the purchase order, payment shall be made as per GST rate which is lower of the GST rate incorporated in the purchase order or billed. IV. Any amendment to GST rate or HSN number in the contract shall be as per the contractual conditions and statutory amendments in the quoted GST rate and HSN number, under SVC. B. Are you eligible for availing benefits and preferential treatment extended to Micro and Small Enterprises (MSEs). If so, the necessary documents as per special conditions for MSEs for claiming benefits and preferential treatment extended to MSEs to be attached. C. In case the successful tenderer is not liable to be registered under CGST/ IGST/ UTGST/ SGST Act, the railway shall deduct the applicable GST from his/their bills under Reverse Charge Mechanism (RCM) and deposit the same to the concerned tax authority. D. Performance statement of orders received and supplies made for last three years for subject item is must for all tenderers including approved sources. 59. Having regard to the terms, we cannot cull out a public duty to provide for the correct HSN code. Therefore, we cannot support the impugned judgment based on the issuance of tenders as contended. REVERSE CHARGE MECHANISM 60. We have noticed that the appellants have contended that the liability to pay the GST, an indirect tax, lies with supplier of goods and services. The exception which is admitted by the appellants is in cases covered under Section 9(3) of the GST Act which provides for reverse charge mechanism. Under the reverse charge mechanism, the liability to pay tax is on the recipient of the goods or services or both. This would indeed mean that if the appellants are in the shoes of persons who become liable as recipients of goods and services or both under Section 9(3), then it will be the liability of the appellants to pay such tax. Strictly speaking this question does not appear to arise on the facts. At any rate, we do not see how the writ petitioner can advance its case on the basis of this aspect as it is essentially the look out of the appellants. We must not be oblivious to the fact that the complaint of the appellant is the denial of a level playing field among the tenderers. It is obvious that the appellants as purchasers of the goods and services are obliged to purchase the goods and services which are otherwise compliant with the tender conditions at the cheapest rate. In a case where it is liable under revere charge mechanism, it would be the look out of the appellant in public interest to ensure that it will end up purchasing goods at the cheapest rate possible. It is elementary that even the lowest bidder would not have right to have his bid accepted and is always open to the appellants in public interest and in accordance with the tender condition to reject even the lowest bid. No doubt if the tax rate in such a case is separately insisted upon, then on the rate acceptable to the appellants, the gross outflow can be calculated consisting the amount to be paid to the successful tenderer and the amount to be remitted to the revenue. In this regard, we notice from the tender condition relied upon by the writ petitioner which we have extracted at paragraph 58, what is contemplated is that the amount would be deducted at the applicable GST rate from the bill under the Reverse Charge Mechanism and deposited with the concerned tax authority. If under the terms of the tender, what is contemplated is that, in a case where the tax component is not included or it is included at a lower rate, the appellants are entitled to deduct the actual rate of tax as payable by it under the Reverse Charge Mechanism and the tender of such a person is accepted being the lowest tender, then there can be no question of public interest being prejudiced. If on the other hand, the tax rate is included and the clause provides for deduction of the actual rate from the bill, then also public interest may not be affected. This is all the more reason for the tenderer specifically including the tax component indicating the correct rate of tax. This is a matter where the first appellant can consider giving appropriate instructions.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]We would think that this is not a matter which is res integra. As early as in Comptroller and Auditor General of India, Gian Prakash, New Delhi and another v. K.S. Jagannathan and another (1986) 2 SCC 679,  a Bench of three learned Judges of this Court had this to say:18. The first contention urged by learned counsel for the appellants was that the Division Bench of the High Court could not issue a writ of mandamus to direct a public authority to exercise its discretion in a particular manner. There is a basic fallacy underlying this submission—both with respec t to the order of the Division Bench and the purpose and scope of the writ of mandam us. The High Court had not issued a writ of mandamus. A writ of mandamus was the relief prayed for by the respondents in their writ petition. What the Division Bench did was to issue directions to the appellants in th e exercise of its jurisdiction under Articl e 226 of the Constitution. Under Article 226 of the Constitution, every High Court has the power to issue to any person or authori ty, including in appropriate cases, any gov ernment, throughout the territories in rela tion to which it exercises jurisdiction, directions, orders, or writs including writ s in the nature of habeas corpus, mandamus, quo warranto and certiorari or any of them, for the enforcement of the Fundamental Righ ts conferred by Part III of the Constitutio n or for any other purpose. In Dwarkanath v. ITO [AIR 1966 SC 81 : (1965) 3 SCR 536 , 54 0] this Court pointed out that Article 226 is designedly couched in a wide language in order not to confine the power conferred by it only to the power to issue prerogative writs as understood in England, such wide language being used to enable the High Courts to reach injustice wherever it is found and to mould the reliefs to meet the peculiar and complicated requirements of this country. In Hochtief Gammon v. Sta te of Orissa [(1975) 2 SCC 649  : 1975 SCC (L&S) 362 : AIR 1975 SC 2226  : (1976) 1 SCR 667 , 676] this Court held that the powers of the courts in England as regards the control which the Judiciary has over the Executive indicate the minimum limit to which the courts in this country would be prepared to go in considering the validity of orders passed by the government or its officers.20. There is thus no doubt that the High Courts in India exercising their jurisdiction under Article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the government or has exercised such discretion mala fide or on irrelevant considerations or by ignoring the relevant considerations and materials or in such a manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the court may itself pass an order or give directions which the government or the public authority should have passed or given had it properly and lawfully exercised its discretion.16. Three years thereafter, in the decision reported in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and others v. V.R. Rudani and others (1989) 2 SCC 691,  while dealing with the word authority, used in Article 226 and also dealing with the issue as to whether Mandamus will lie even if the duty is not imposed under a Statute, this court held as follows:20. The term authority used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Arti cle 12 is relevant only for the purpose of enforcement of fundamental rights under Art icle 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as non-fu ndamental rights. The words any person or authority used in Article 226 are, therefo re, not to be confined only to statutory au thorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the bod y concerned is not very much relevant. What is relevant is the nature of the duty impos ed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected par ty. No matter by what means the duty is imposed, if a positive obligation exists ma ndamus cannot be denied.22. Here again we may point out that mand amus cannot be denied on the ground that th e duty to be enforced is not imposed by the statute. Commenting on the development of this law, Professor de Smith states: To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract. [ Judicial Revi ew of Administrative Action, 4th Edn., p. 5 40] We share this view. The judicial contro l over the fast expanding maze of bodies affecting the rights of the people should not be put into watertight compartment. It should remain flexible to meet the requirem ents of variable circumstances. Mandamus is a very wide remedy which must be easily available to reach injustice wherever it is found. Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the cont ention urged for the appellants on the main tainability of the writ petition.19. Having cleared the air with regard to the jurisdiction of the High Court in the matter of a Writ of Mandamus or a direction in the nature thereof, we may proceed next to the law relating to the ambit of the Courts jurisdiction in judicial review in contractual matters. It is, undoubtedly, too late in the day to countenance the contention that the mandate of fairness in State action does not extend to the realm of contract entered into by the State. We would not burden our judgment chronicling the catena of decisions, which have expounded the law in this regard. We deem it sufficient if we refer to the judgment of this Court in Reliance Telecom Ltd. and another v. Union of India and another (2017) 4 SCC 269 . After an exhaustive survey of case law, this Court, inter alia, held as follows:42. In Global Energy Ltd. v. Adani Exports Ltd. [Global Energy Ltd. v. Adani Exports Ltd., (2005) 4 SCC 435] , this Court reiterated the principles that: (SCC p. 441, para 10)10. … the terms of the invitation to tender are not open to judicial scrutiny and the courts cannot whittle down the terms of the tender as they are in the realm of contract unless they are wholly arbitrary, discriminatory or actuated by malice.44. In Michigan Rubber (India) Ltd. v. State of Karnataka [Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216]  , the Court, after referring to Jagdish Mandal v. State of Orissa [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517]  and Tejas Constructions & Infrastructure (P) Ltd. v. Municipal Council, Sendhwa [Tejas Constructions & Infrastructure (P) Ltd. v. Municipal Council, Sendhwa, (2012) 6 SCC 464]  , expressed the view that (at SCC p. 229, para 23) the basic requirement of Article 14 is fairness in action by the State, and non- arbitrariness in essence and substance is the heartbeat of fair play and actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose and if the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities. It further observed that fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers and greater latitude is required to be conceded to the State authorities in the matter of formulating conditions of a tender document and awarding a contract. The Court also laid emphasis on public interest and the prudence in applying the principle of restraint where the action is fair and reasonable and does not smack of mala fides. It was also emphasised that the courts cannot interfere with the terms of the tender prescribed by the Government simply because it feels that some other terms in the tender would have been fair, wiser or logical.20. This Court also laid down paragraph 46 as follows:46. In Census Commr. v. R. Krishnamurthy [Census Commr. v. R. Krishnamurthy, (2015) 2 SCC 796  : (2015) 1 SCC (L&S) 589] , a three-Judge Bench of this Court, after noting several decisions, held that (SCC p. 809, para 33) it is not within the domain of the courts to embark upon an enquiry as to whether a particular public policy is wise and acceptable or whether a better policy could be evolved and the courts can only interfere if the policy framed is absolutely capricious or not informed by reasons or totally arbitrary and founded on ipse dixit offending the basic requirement of Article 14 of the Constitution. It further observed that in certain matters, as often said, there can be opinions but the court is not expected to sit as an appellate authority on an opinion.21. We must also bear in mind the judgment which is relied upon by the High Court in the impugned Judgment. The High Court has drawn support from the Judgment of this Court in Reliance Energy Ltd. and another v. Maharashtra State Road Development Corpn. Ltd. and others (2007) 8 SCC 1 :36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of non-discrimination. However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to right to life. It includes opportunity. In our view, as held in the latest judgment of the Constitution Bench of nine Judges in I.R. Coelho v. State of T.N. [(2007) 2 SCC 1]  , Articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life. Level playing field is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of level playing field. We may clarify that this doctrine is, however, subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of level playing field is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. Globalisation, in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of globalisation. Decisions or acts which result in unequal a nd discriminatory treatment, would violate the doctrine of level playing field embodied in Article 19(1)(g). Time has come, therefore, to say that Article 14 which refers to the principle of equality should not be read as a stand alone item but it should be read in conjunction with Article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated doctrine of level playing field. According to Lord Goldsmith, commitment to the rule of law is the heart of parliamentary democracy. On e of the important elements of the rule of law is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of reasonableness, then such an act or decision would be unconstitutional.38. When tenders are invited, the terms and conditions must indicate with legal certainty, norms and benchmarks. This legal certainty is an important aspect of the rule of law. If there is vagueness or subjectivity in the said norms it may result in unequal and discriminatory treatment. It may violate doctrine of level playing field.22. It becomes, however, necessary to notice the context in the said case, which persuaded the Court to make the aforesaid observations. The case involved a global tender floated to award a contract, which was to be done by effecting selection in two stages. The relevant clause in the tender document, inter alia, contemplated the fulfilment of certain financial requirements. We may refer to the following discussion, which gives the factual context:50. Taking into account the above principles, it is clear that there are two methods of cash flow reporting i.e., direct and indirect. Both give identical results in the matter of the final total. They differ only in presentation of the data. They differ only in presentation of the data contained in the cash flows from operational activities. No reason has been given by the consultants of MSRDC for rejecting the indirect method invoked by KPMG, chartered accountants of REL/HDEC in their letter dated 12-8-2005. The said method is known as reconciliation method.23. The observations made by the Court, undoubtedly, draw inspiration from factual matrix essentially involved in the culling out of the principle of level playing field, which was found to be impaired on the basis of a lack of legal certainty, as found established by the material available on record. In the course of observations in paragraph-36, this Court held that Article 19(1)(g) confers a Fundamental Right to carry on a business to a company. We would accept it, subject to the caveat that Article 19 confers a right on the citizens, who are natural persons. However, we take it that, what the Court had in mind was, a situation where the company is in the party along with one or more shareholders, who are citizens of India. However, there can be no quarrel with the position at law, having regard to the undeniable and breath-taking advances made by the Courts, drawing inspiration from Article 14 that equals must be treated equally and more importantly, the other facet of Article 14, viz., that all actions of State must be fair, which constitutes the major plank of attack against State action in the arena of contracts. This again is subject to the self- restraint in matters, the scope of which has been dealt with in regard to various aspects of the matter, starting with cases relating to challenge to the very terms of the tender and culminating in the actual award of the contract. Unless such actions are found to be clearly arbitrary, illegal, malafide or contrary to any Statute, the courts would be loathe to fetter even the limited area of freedom of the State has to take decisions which are fair in cases relating to contractual matters.31. The High Court, in the impugned Judgment, has correctly noticed the contours of the jurisdiction of courts in the realm of judicial review of action of State in matters relating to contracts. It is correctly found that the Court cannot examine the details of the terms of the contract. The Judgment is apparently entirely premised on the observations made by this Court in Reliance Energy Ltd. (supra). It has proceeded to support its intervention in the Writ Petition, placing reliance on paragraphs 36 and 38 which we have already referred to above. Thereafter it poses the question, as to whether the classification of the HSN Code is integral to the tendering process and answers it by holding that it is integral and then founds its interference in the manner done by finding that fair competition or level playing field would be denied to each bidder as someone may bag the tender by quoting the lesser rate of GST, creating a substantial difference in the total price. Undoubtedly, selection is based on aggregating the base price with the tax (GST). If there is lack of clarity, each bidder would be in a position to take a shot at the tender by understating the value of the tax.32. We are of the view that in the facts of the case, the High Court has erred. The Court was dealing with a matter pursuant to the NIT dated 11.04.2019. The tenderers including the writ petitioner, participated in the tender and quoted their rates. We cannot be oblivious to the averments in the writ petition that even previously the same issue had arisen for the procurement of the identical product. The bids were opened on 23.11.2018, wherein, some other bidders quoted at the rate of 5 per cent as the tax liability. The writ petitioner had according to it, has written letter dated 07.12.2018, pointing out that the product fell under Chapter 84 and even the appellants had imported the same product under HSN Code 84148090 attracting GST at the rate of 18 per cent. It also drew inspiration from a letter from the Ministry of Finance, Department of Revenue, dated 30.04.2018, being Circular No.30/4/2018GST, wherein, it was stated that the Council took certain decisions. It also referred to customs invoice dated 21.03.2017, showing import of the product with GST rate being show at 18 per cent. There is also reference to a letter dated 04.06.2018, written by the writ petitioner to the Executive Director of Public Grievance, Ministry of Railways. Therefore, the writ petitioner must be treated as aware of the consequences that would flow from the effect of the terms of the Notification. We, however, notice that the writ petitioner went ahead and made its bid pursuant to the NIT dated 11.04.2017. The case of the writ petitioner, admittedly is, that the appellants opened the tender and made a tabulated statement and found that the writ petitioner would stand ranked at L4.36. What is involved before the Court is not a direct challenge to the terms of the tender. The writ petitioner did not choose to challenge the terms of the NIT dated 09.04.2019 despite admitted understanding of the working of similar tender notification leading to some of the bidders showing the GST rate at 5 per cent and even writing about it. The writ petitioner chose to participate in it and filed its bid, showing the tax rate at 18 per cent. The entities, which were shown as entitled to rank as L1 to L3, have shown the tax GST liability as 5 per cent on the product. It is thereafter that the Writ Petition was filed seeking the reliefs, we have already noticed.37. The appellants stand in the shoes of a purchaser of goods and services. By the global tender floated by the appellants, the appellants called for e-tenders from intending suppliers of the goods. The terms of the tender were well-known to the tenderers. Under Clause 2.7.6, undoubtedly, the bidders and the tenderers, while quoting the rates, were to clearly indicate the rate of applicable duties and taxes included in the price quoted by them. Let us pause for a moment and analyse its true meaning. Under the said Clause, the bidders were to quote the rate of applicable duties and taxes, which were included in the price quoted by them. This Clause must be read in conjunction with Clause 2.8.6, which provides that the purchaser (appellants) will not be responsible for the payment of taxes and duties paid by the supplier, on the basis of the misclassification or a misapprehension of law. This would mean that the appellants as purchaser was making it clear that it will have no liability to shoulder, in the payment of tax if it is found that, while indicating the rate of applicable duty or tax by the tenderer, it has wrongly quoted a rate which is lower than the rate, which it was liable to pay in law. The quoting of the rate, in other words, by the tenderer, within the meaning of Clause 2.7.6, would bind the tenderer and he would not be heard to say that he had arrived at the rate and made the bid and which stood accepted, on the basis of misapprehension of law or misclassification. On the one hand, Clause 2.7.6 gives the impression that all the bidders/tenderers should clearly indicate the rate of the applicable duty and tax in the price quoted by them. We must however read it in conjunction with Clause 2.9.2. The said Clause provides for a clear duty with the tenderer to acquaint themselves with all the applicable taxes and duties. It further provides that in a case, where the taxes and duties are not indicated explicitly in their offer, the same will be considered, which means, the offer will be considered as inclusive. The meaning of this Clause can only be that while ordinarily the tenderer would and should include in the tender not only the base price but the taxes and the rate of tax and arrive at the global sum at which he is making the bid, Clause 2.9.2 provides for the contingency of the tenderer not indicating about the applicable taxes and duties. In other words, he merely quotes a sum without specifically mentioning about the taxes and duties or the rates. This is pointed out by the learned ASG to contend that the fallacy committed by the High Court lies in it, not giving full meaning to the said Clause.38. It is clear that the Clauses read together will yield the following result, bearing in mind also the GST regime. The liability to pay tax under the GST regime is on the supplier. He must make inquires and make an informed decision as to what would be the relevant HSN Code applicable to the items and the rate of tax applicable. Thereafter, when he makes the bid, the issue of competition for winning the bid, would come into clear focus. The goal of the bidder ordinarily is to emerge successful and bag the contract. The extent of profit that he would earn, is a matter, which is essentially a matter to be decided by him. He may, for germane reasons, wish to bag a contract, with situations ranging from one extreme end of the spectrum, viz., even when the prospect of a loss stares at him, or a slightly brighter outcome, viz., the contract working on a break-even basis or moving on to an even more optimistic possibility, namely, of the contract earning him profit, which he is willing to take at a modest rate or a rate which he considers as reasonable in his understanding and circumstances. This is a matter to be left to the commercial expediency of the bidder. Now, when the matter is viewed from the perspective of the purchaser, the purchaser seeks to buy goods and services or both by awarding the contract to the lowest bidder. When the purchaser happens to be the State, it would be not fair or reasonable to not expect it to accept the bid of the lowest bidder unless it decides to not accept the bid of the lowest bidder for reasons which are fair and legal. No doubt, it is not the law that the Government is bound to accept the lowest bid. It is always open to the Government for relevant, valid and fair reasons, to not accept even the lowest bid.39. The terms of the bid cannot be said to be afflicted with the vice of legal uncertainty. This is not a case where the principle as enunciated in Reliance Energy (supra) would be apposite. It is elementary that principles enunciated in the facts of a case are not be likened to Euclids Theorem, having an inexorable operation divorced from the facts which arise for consideration. In this case, the interplay of the three Clauses, which we have referred to, and its conjoint operation, could not have left the bidders or the purchasers (appellants) in any uncertainty.40. The appellants relied on the judgment of this court in Sarvesh Refractories (P) Ltd. v. Commissioner of Central Excise and Customs (2007) 13 SCC 601 .In the said case the product in question was classified by the officer having jurisdiction over the manufacturers factory as falling under a particular heading. The case of the appellants therein was that the heading should be different. The appellant was the consumer of the goods. It was found by the Tribunal that the appellant as a consumer could not get the classification changed from that of the officer having jurisdiction over the seller. This Court approved the said view. Therefore, the appellants would contend that since the liability to pay the tax is on the successful tenderer (supplier) and Sections 59 and 60 of the GST Act casts the burden on the tenderers to file return, self-assess and pay the tax, it is the jurisdictional officer relevant to the supplier who can make the proper classification. The appellants would stand in the shoes of a purchaser. The appellants cannot therefore be expected to find out the HSN Code and announce it so as to bind the tenderers or fetter the power of jurisdictional officer of the supplier.41. Learned Additional Solicitor General purportedly drew support from the judgment of this court in Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran (2012) 5 SCC 306 .In the said case, the appellant who was the manufacturer of certain products entered into handling contract with the respondent. A clause in the contract inter alia provided that the respondent was to bear and pay all taxes, duties and other liabilities in connection with the discharge of his obligation. The clause, in question, also permitted the appellant to deduct taxes or duties at source in the matter of payment of bill to the respondent. The appellant deducted 5 per cent towards Service Tax. Thereafter, in accordance with the law, as it stood, there was a retrospective amendment by which the liability to pay the service tax stood shifted to the recipient of service. The Arbitrator, appointed to resolve the dispute raised by the respondent that he was not liable to pay the tax on the goods, rejected the contention. The award was set aside by the High court. What is of relevance are the observations in paragraphs 37 and 39. It reads as under:37. As far as the submission of shifting of tax liability is concerned, as observed in para 9 of Laghu Udyog Bharati [(1999) 6 SCC 418] , service tax is an indirect tax, and it is possible that it may be passed on. Therefore, an assessee can certainly enter into a contract to shift its liability of service tax.39. The provisions concerning service tax are relevant only as between the appellant as an assessee under the statute and the tax authorities. This statutory provision can be of no relevance to determine the rights and liabilities between the appellant and the respondent as agreed in the contract between the two of them. There was nothing in law to prevent the appellant from entering into an agreement with the respondent handling contractor that the burden of any tax arising out of obligations of the respondent under the contract would be borne by the respondent.It was further found that the clause properly read could not support the case of the respondent.There is an eminent need for the State (appellants) to indicate the HSN Code. Once it is indicated, it becomes a panacea, as it were, to the evil, which has been perceived and successfully pressed by the writ petitioner. Is that so? The answer to this question, has both legal and factual dimensions. As far as the legal aspects are concerned, the fundamental question, we must pose is, whether there exists any public duty with the appellants to indicate the HSN Code when they float a public tender. Here the learned ASG is correct, when he points out that there is no statutory duty cast on the appellants to indicate the HSN Code in a tender of the kind we are concerned with. Proceeding on the basis that a public duty may emerge, not merely from a Statute but in various other ways, which has been touched upon, in Andi Mukta (supra) as also, in Mansukh Lal (supra) and even on an expansive exploration, does such a duty flow from any other legitimate source?45. The Communication, no doubt, indicates that the purchaser may incorporate HSN Number in the tender document. While the use of the word may in a statute is capable of being interpreted as mandatory and assuming that we can apply such a principle to a circular we would hold that having regard to the context, the consequences that follow, the tax regime and the public interest, a mandatory duty cannot be spelt out.46. We are of the view that when read in a holistic manner, the purport of the Railway Board is that it is the responsibility of the bidder to quote the correct HSN Number and the corresponding GST rate. We have already unravelled the true scope of the relevant Clauses and wide range of results that would follow on its true construction. It may be true that the circular permits the purchaser to indicate the HSN Number. The purchaser may indicate it. That is a far cry from holding that the communication enshrines a public duty which can be enforced by way of Mandamus. While it is true that in a given case, when a Public Authority is vested with a discretionary power under a Statute, it can be directed to exercise a discretion, it may not be legal to direct even a statutory functionary to exercise the discretion in a particular manner. The very idea of a discretionary power would suffer annihilation, if it ceases to be discretionary in the hands of a Court ordering a Mandamus. No doubt, there may be cases where the facts are such that the court is not powerless to direct the Authority to do a thing which it considers absolutely necessary and just and legal to perform the act even when the Authority seeks shelter on the basis that what is conferred on it, is a mere discretion. The other terms of the circular clearly appear to indicate that the rate even if indicated by the appellants will not detract from the tenderers quoting the rate which is up to them. It is the rate quoted by the tenderers which governs. It is the same which will be used to carry out the ranking. The other terms also militate against a public duty with the appellants as directed. The appellant seeks to protect its best interest as a player in the commercial field. The clauses are self-evident.47. In this regard, we must not overlook the consequences of reading the word may in the letter dated 05.09.2017 as casting a mandatory duty. This would bring us to frontally face the question of how the purchaser would go about implementing such a direction. Sections 96 to 103 of the Central Act, as also of the State GST Act do provide for the mechanism of advance ruling. If the purchaser is to include the HSN Code, there must be a mechanism to give effect to what is directed by the High Court, viz., to clarify the issue with the GST Authorities relating to the applicability of the correct HSN Code of the product and thereafter mention in the NIT. To describe this as impractical and the direction given being without bearing in mind the conspectus of the statutory provisions of the GST Acts, cannot but be correct. Under the provisions relating to advance ruling, while it is true that the question which can become the subject matter of advance ruling includes questions relating to classification of goods and services, there is a detailed procedure provided in the matter. The matter does not rest with the decision of the original Authority. A right of appeal is provided. The matter may travel to the Supreme Court. The provisions contemplate powers of a civil court in the matter of discovery, adducing of evidence etc. In other words, it is long drawn and elaborate procedure and the direction to clarify with the GST Authorities, as directed by the High Court, can hardly square with the cumbersome and elaborate process detailed in the Chapter relating to the advance ruling. The advance ruling, we notice, is binding on the applicant ordinarily. No doubt, it has a wider impact in circumstances detailed in Section 103(1A). We are at a loss to further understand how in the name of producing a level playing field, the State, when it decides to award a contract, would be obliged to undertake the ordeal of finding out the correct HSN Code and the tax applicable for the product, which they wish to procure. This is, particularly so when the State is not burdened with the liability to pay the tax. The liability to pay tax, in the case before us, is squarely on the supplier. There are adequate safeguards and Authorities under the GST Regime must best secure the interests of the Revenue.It is difficult to accept the case of the writ petitioner that appellants must seek the clarification contemplated in the impugned Judgment by resorting to Section 168 of the Central Act or the State Act. Section 168 does not expressly provide for right to any person to seek a direction as contemplated therein. Further, we may notice that there is an express power provided in the provisions relating to advance ruling. There is an elaborate procedure to be followed and even right of appeal. At any rate, power under Section 168 is essentially meant for officers to seek orders, instructions or directions besides the Board itself on its own passing orders, in the interest of maintaining uniformity in the implementation of the Act.49. We cannot ignore the case of the appellant that the Circular cannot bind the supplier and the Circular can be challenged in an appropriate proceeding. Appellants contend that it does not represent a final view, and does not bind the court and a circular which is in the teeth of the statute can have no existence in law. In this regard our attention is drawn to the judgment of this Court in (2008) 13 SCC 1 . It is further contended that the circular cannot bind the appellants who are only purchasers of the product. There is no duty cast on the Board under the Central Act or on the Commissioner under the State Act to issue any clarification, as directed in the impugned Judgment. There is no duty cast on the appellants to seek such direction. Therefore, the appellants are right in contending that there is no statutory duty, which could have been enforced in the manner done in the impugned Judgment. There is no public duty which is enforceable.Proceeding on the basis that it was a unit of the railways, this by itself cannot bind the appellants to comply with the impugned judgment. The nature of the clauses and the liability to pay tax detract from the appellants being bound, particularly in the absence of any public duty. We agree with the appellants.52. In this case, the second respondent has been found to be L1 for 593 pieces of turbo wheel impeller balance assembly. We see from the Counter Affidavit, filed in the High Court, by the appellants, that it was, inter alia, contended that the tendered product is Turbo Wheel Impeller Assembly and not Turbo Super Charger. In the Rejoinder Affidavit, filed by the writ petitioner, we noticed at page-764 onwards of the SLP Paper Book that the writ petitioner has joined issue and contended that the stand of the appellants in the Counter Affidavit was without appreciating that the product is the most integral part of Turbo Charger, without which, the Turbo Charger is rendered commercially redundant. The end item is a Turbo Charger, which houses the Impeller Wheel Assembly and is not an associated product but rather a component of Turbo Charger itself. We further notice the specific stand of the writ petitioner that in the light of the fact that the functionality and commercial purpose of both these products are the same, they have to be classified under the same Head and taxed at 18 per cent. A Chartered Engineers Certificate was produced. So was the diagram. In fact, having regard to the nature of the dispute about the product, it brings into sharp focus, the complex nature of the problem, which appears to have been oversimplified in the matter of issuing the impugned direction. We have already noticed that the second respondent (L1) projected this dispute, even in this Court as well.53. As far as the Make in India Policy is concerned, relied upon by the writ petitioner, which is dated 15.06.2017, it is, no doubt, true that it is a very significant move by the Government to promote the manufacture of goods and services in India, thereby effectively dealing with the problem of unemployment and increasing the income of its people. There is no dispute also that the writ petitioner is an approved local supplier within the meaning of the Order. It is equally true that a preference is contemplated for local suppliers as defined in the Order. The margin of difference between L1 and the local supplier cannot exceed 20 per cent. It is also not in dispute that on the basis of the total price quoted, the margin of purchase preference is much more than 20 per cent.In this connection, we may also notice the definition of L1. L1 has been defined as meaning the lowest tender or the lowest quotation, inter alia, as adjudged in the valuation process as per the tender or other procurement solicitation. Thus, L1 is, undoubtedly, to be determined, based on the terms of the tender.55. In the definition of the word local content, it may be true that, when the value of the imported content in the item is calculated, all the customs duties must be included. The claim of the writ petitioner is that, when the HSN Code, for the purpose of calculating the custom duty, is to be found out for determining the local content, then, there can be no reason to not include the HSN Code for the item for the purpose of GST. We are unable to agree. Proceeding on the basis, that for determining the local content, the HSN Code of the item, for the purpose of custom duty, is to be found, that may not justify the writ petitioner from contending that the HSN Code for the GST must be included in the tender conditions. This is for the reason that, apart from the absence of any duty with the appellants to indicate compulsorily the HSN Code, we would have to overlook the operation of the terms of the tender. Under Clause 2.9.2, we have noticed that a tenderer can make his bid without adding any tax component. It is open to the bidder, wholly or partly, to absorb the tax effect. In other words, being an indirect tax, while it is open to a bidder to pass it on to the buyer (the appellant), nothing stands in the way of the bidder, partly or wholly, absorbing the tax. The liability to pay the tax under the GST regime is with the supplier unless it falls under Section 9(3) of the GST Act. Further, the appellants cannot declare a GST rate and make it binding on the bidder. The correctness of the Code/rate can, at best, be the appellants understanding of the same. This is why, in the Circular dated 05.09.2017, issued by the Railway Board, it conferred a discretion on the purchaser, to incorporate the HSN Number in the tender document. This is carefully conditioned by the caveat that, the responsibility to quote the correct HSN Number and corresponding GST rate, is to be on the bidder. Still further, the Railway Board has contemplated that during the transition phase, it was to be provided that offers will be evaluated, based on the GST rates quoted by each bidder and the same will be used for determining the inter se ranking. When a successful bidder invoices the goods with the GST rate or HSN Number different from that incorporated in the purchase order, payment is to be made at the rate, which is lower of the GST rate, as between what is incorporated in the purchase order or the invoice. It is further made clear in the Circular dated 05.09.2017 that if a higher tax rate is billed and an all-inclusive price is mentioned in the purchase order, then, the basic price would have to be accordingly adjusted to make it in conformity with all- inclusive price.56. We cannot therefore hold that in view of the Make in India policy as contained in the order dated 15.06.2017, there is duty to declare the HSN code in the tender and what is more, make the tenderers quote the rate accordingly.57. Unless Clause 2.9.2 is done away with (it must be remembered that there is no challenge to Clause 2.9.2), the tenderers would be free to quote a lumpsum rate without including the tax rate. The further and more important obstacle is the mechanism or rather the absence of the same by which the purchaser of goods and services (the appellants) can be compelled to ascertain the correct HSN Code. The direction by the High Court is to clarify with the Tax Authorities. We have noticed that there is no provision for clarification, as such. The only provision which clearly deals with classification is provision for advance ruling. We have noticed the nature of the procedure in the Chapter dealing with advance ruling. We would have to assume that the appellants will be compelled to go through the said cumbersome procedure and, at the end of it, proclaim the HSN Code. The appellants purchase several goods and services. Each time, the appellants purchase goods and services or both, if the impugned Order is to be sustained, the appellants would have to resort to the prolonged proceedings in a matter where the appellant had no liability to pay the tax. All of this is premised on the writ petitioners quest for the perfect level playing field. That apart, we have also noticed, how the interests of the appellant, which it pursues as an actor in the commercial world, but wearing the mantle of State obliging it to act fairly, would not empower the Court in judicial review to mandate for a duty, not supported by any Statute, the terms of the bidding document and any other binding instrument. We have already found that Circular dated 05.09.2017, issued by the Board, does not provide for the mandatory duty to specify the HSN Code.Since the first appellant is the Union of India, we would expect that if it is otherwise permissible to sustain the impugned judgment, it may not be fair to not have a uniform policy in the matter of award of largesse by the various units under it. However, the appellants do point out that even in the tenders which have been brought out, the HSN Code mentioned in the tender is shown as indicative only. It has been provided in the tenders relied upon by the writ petitioner that it will be the responsibility of the bidder to quote the correct HSN Code and the corresponding GST rate while submitting the offer.59. Having regard to the terms, we cannot cull out a public duty to provide for the correct HSN code. Therefore, we cannot support the impugned judgment based on the issuance of tenders as contended.60. We have noticed that the appellants have contended that the liability to pay the GST, an indirect tax, lies with supplier of goods and services. The exception which is admitted by the appellants is in cases covered under Section 9(3) of the GST Act which provides for reverse charge mechanism. Under the reverse charge mechanism, the liability to pay tax is on the recipient of the goods or services or both. This would indeed mean that if the appellants are in the shoes of persons who become liable as recipients of goods and services or both under Section 9(3), then it will be the liability of the appellants to pay such tax. Strictly speaking this question does not appear to arise on the facts. At any rate, we do not see how the writ petitioner can advance its case on the basis of this aspect as it is essentially the look out of the appellants. We must not be oblivious to the fact that the complaint of the appellant is the denial of a level playing field among the tenderers. It is obvious that the appellants as purchasers of the goods and services are obliged to purchase the goods and services which are otherwise compliant with the tender conditions at the cheapest rate. In a case where it is liable under revere charge mechanism, it would be the look out of the appellant in public interest to ensure that it will end up purchasing goods at the cheapest rate possible. It is elementary that even the lowest bidder would not have right to have his bid accepted and is always open to the appellants in public interest and in accordance with the tender condition to reject even the lowest bid. No doubt if the tax rate in such a case is separately insisted upon, then on the rate acceptable to the appellants, the gross outflow can be calculated consisting the amount to be paid to the successful tenderer and the amount to be remitted to the revenue. In this regard, we notice from the tender condition relied upon by the writ petitioner which we have extracted at paragraph 58, what is contemplated is that the amount would be deducted at the applicable GST rate from the bill under the Reverse Charge Mechanism and deposited with the concerned tax authority. If under the terms of the tender, what is contemplated is that, in a case where the tax component is not included or it is included at a lower rate, the appellants are entitled to deduct the actual rate of tax as payable by it under the Reverse Charge Mechanism and the tender of such a person is accepted being the lowest tender, then there can be no question of public interest being prejudiced. If on the other hand, the tax rate is included and the clause provides for deduction of the actual rate from the bill, then also public interest may not be affected. This is all the more reason for the tenderer specifically including the tax component indicating the correct rate of tax. This is a matter where the first appellant can consider giving appropriate instructions.