• Case for issuance of Procurement Preference Certificate

We are a UPVC Pipe manufacturer in tripura. Generally, we are getting tender order against Procurement Preference Certificate issued by local DIC. One U.P based tenderer lodged a writ petition in Tripura High Court for cancellation of Issue of Procurement Preference Certificate in our favor, as because we have submitted two different balance sheets in two different places. The petitioner has collected our Balance Sheets through RTI and submitted before the court. 
    As per conditions of Tripura Industrial Investment Incentives Promotion Scheme, 2012 
        Procurement Preference
 8.1 Subject to their meeting the quality, delivery and other specifications of the
purchasing State Government Agencies, Procurement Preference will be given
on all purchases by State Government Agencies – including Departments/
Corporations/ Public Sector Enterprises/ Autonomous Bodies/ Aided
Institutions of the State Government – on products manufactured in Tripura by
eligible enterprises.
 8.2 The procurement preference would be applicable in case of items being
procured through tendering process by the State Government Agencies. For
extension of procurement preference, the landed price of the item being
procured shall be calculated, for all the eligible tenderers, at the destination
specified by the purchaser, before the imposition of Tripura Value Added Tax
or any other applicable commodity taxes under relevant Acts of the State
Government on the final purchase by the State Government Agencies. The
landed price would, however, include value added tax in the State of origin,
excise duty, insurance charges, freight costs and Central Sales Tax imposed
prior to the goods entering the State of Tripura, quoted by supplier located
outside Tripura.
 8.3 The procurement purchase for enterprises in Tripura shall operate as follows:
a) In cases where after comparison of the landed price of all eligible
tenderers, one or more local industrial enterprise(s) emerge as the first
lowest tenderer, the said enterprise(s) shall be eligible to get supply
order for 100% of the tendered quantity of the item being procured by
the State Government Agencies.
b) In cases where after comparison of the landed price of all eligible
tenderers, the first lowest tenderer is an enterprise from outside the
State; but the price of one or more local industrial enterprise(s) is not
over 15% of the price quoted by the first lowest tenderer, the said local
industrial enterprise(s) shall be eligible to get supply order for 100% of
the tendered quantity of the item being procured by the State
Government Agencies, except in case of cement, steel and GCI sheet,
where 65:35 ratio for local/ outside bidders will be followed, provided
that they shall be ready to supply the same by matching the price
offered by the first lowest tenderer.
8.4 In order to be eligible for benefits under this clause, an enterprise shall have to
achieve at least 30% value addition within the State, to be ascertained in the
manner as may be prescribed by the State Government. “Value Addition” for
this purpose would mean the difference between the total landed cost (in
Tripura) of all inputs used in production and the selling price for every unit of
the item being procured.
 8.5 Notwithstanding anything contained in Clause 4 & 5 of the Scheme-2012, the
incentive under this clause shall be available to all the local enterprises
irrespective of their date of commencement of commercial production; i.e.,
enterprises who started commercial production, prior to 1st April, 2012 shall
also be eligible for benefit under this clause, subject to fulfillment of other
eligibility conditions.

   As per submission of two different Audited Balance Sheets there is a mismatch of the percentage to be maintained as Value Added Tax as prescribed by the state. One Balance sheet is showing 32% Value Addition while the other is showing 22% Value Addition. At the time of hearing Chief Justice Mr. Deepak Gupta allowed 1 week time for making us clarify the matter of such Balance Sheet submission.  
   If we don't clarify this matter, case may be against us and as a result our unit will be a Sick Industrial Unit. 
   Please suggest us a suitable advice on this matter as soon as possible.

Thanking You,
Yours Faithfully
Hari Saha

E-Mail:  tripurpolymer@rediffmail.com
Asked 3 years ago in Civil Law from Agartala, Tripura
1) since you have submitted 2 different balance sheet the burden is upon you to explain the mismatch 

2) you have to consult your auditors/ CA to furnish a cogent explanation for the mismatch 

3) you can in your affidavit mention that mismatch occurred on account of mistake made by your accountants in calculation of VAT 

4) it should be mentioned that you met all the tender specifications and order was placed with your company after comparison of all bids . 

5) you had no intention to suppress any material facts and mistake occurred on account of bona fide error by the accountants
Ajay Sethi
Advocate, Mumbai
46645 Answers
2759 Consultations

5.0 on 5.0

1. What was the reason for your submitting two different balance sheets?

2. You can not call it a typographical/clerikal error in mentioning 22% in place of 32% and subsequent calculations based on the wrongly typed VAT rate since balance sheet  is made once in a year which is audited,

3. In short, you certainly shall have to  satisfy the Court as to why and how you have drawn two seperate balance sheets for the same year and got them audited,

4. In case both the balance sheets have been audited by the same CA/Auditor, then he also will be in trouble and be questioned by his Institute,

5. Consult your CA/Auditor and find out a way permissible as per accounting rules/norms.
Krishna Kishore Ganguly
Advocate, Kolkata
18741 Answers
452 Consultations

5.0 on 5.0

Since you have produced two different balance sheet then the burden to prove that the same was submitted in a haste or by mistake is on you. File an affidavit stating the mistake and get it rectified. It is advisable to consult ur CA and proceed further.
Shaveta Sanghi
Advocate, Panchkula
885 Answers
64 Consultations

5.0 on 5.0

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