Calcutta High Court Invalidates District-Specific GST-Based Tender Condition

Background of the Dispute

The Calcutta High Court in Tirupati Agro Seed Distributors Pvt. Ltd. & Anr. Vs State of West Bengal & Ors. examined the validity of a tender condition that effectively limited participation to bidders having a GST-registered office within specific districts of West Bengal.

The case arose from a tender dated 21 January 2026 issued by the Project Officer, Malda, for procurement of Pre-School Education (PSE) Kits for Anganwadi Centres in Malda district. This tender was floated pursuant to instructions issued by the Director of ICDS, Government of West Bengal, to all District Magistrates for centralized procurement of these educational kits.

The controversy centred around Clause 10 of the tender terms, which imposed a local office requirement based on GST registration particulars. The assessee challenged this clause as arbitrary, unconstitutional, and contrary to the GST framework.

Impugned Tender Condition – Clause 10

Text of the Disputed Clause

The condition under challenge, i.e. Condition No. 10, provided:

“Local office requirement: Availability of office in the State as well as District of consignee or Dakshin Dinajpur or Uttar Dinajpur during last 3 years as per GST Registration. Documentary evidence required for this Bid.”

In essence, this clause required that any intending bidder must demonstrate:

  • An office in the State of West Bengal; and
  • An office in either:
    • The consignee’s district, or
    • Dakshin Dinajpur, or
    • Uttar Dinajpur,
  • And such presence must be traceable in the bidder’s GST registration data for the last three years, supported by documentation.

The assessee contended that this condition effectively barred them from participation, even though they held a valid GST registration in West Bengal and possessed adequate capacity and experience to supply the PSE Kits.

Petitioner’s Case

GST Registration and Eligibility

The assessee, Tirupati Agro Seed Distributors Pvt. Ltd., held a valid GST Registration Certificate No. 19AACCT2071R1ZS in respect of its place of business at Berhampore, District Murshidabad, which is within the State of West Bengal and geographically adjacent to Malda district.

The assessee argued that:

  • GST registration is granted State-wise, not district-wise.
  • There is no statutory mechanism under GST for separate registrations for different districts within the same State for the same entity.
  • Consequently, making district-specific GST registration a pre-condition for participation is conceptually flawed and legally untenable.

Prior Participation in Similar Tenders

Counsel for the assessee pointed out that:

  • Similar tenders for PSE Kits had been issued in districts such as Jalpaiguri, Kolkata, and Jhargram.
  • In those tenders, the assessee was allowed to participate.
  • The assessee was found technically and financially eligible and was awarded work orders for the same nature of supplies.

This, according to the assessee, demonstrated that:

  • The assessee’s capacity and competence were already recognized by other district authorities.
  • The impugned Clause 10 in the Malda tender was an outlier and had the effect of selectively excluding them without any rational basis.

Constitutional Challenge under Article 19(1)(g)

The primary constitutional objection was founded on Article 19(1)(g) of the Constitution of India, which guarantees the right to practice any profession or to carry on any occupation, trade or business, subject to reasonable restrictions.

The assessee’s case was that:

  • Conditioning eligibility on the existence of an office in a specific district, tied to GST registration records, amounts to an unreasonable and arbitrary restriction on the right to carry on business.
  • The restriction has no rational nexus with the object of the tender, which is to procure quality PSE Kits at competitive rates for Anganwadi Centres.

Reliance on Supreme Court Judgment in Vinishma Technologies

The assessee strongly relied on the decision of the Supreme Court in:

Vinishma Technologies Pvt. Ltd. vs. State of Chhattisgarh & Anr., 2025 SCC Online SC 2119

In that case, the Supreme Court held that: