The Punjab and Haryana high court (HC) has set aside PGIMER’s order debarring a Delhi-based firm from participating in the institute’s procurement processes for two years over an alleged GST violation.The penalty of debarment/blacklisting results in civil death of an entrepreneur, says the bench. (HT File)The division bench of Justice Deepak Sibal and Justice Lapita Banerji held that the debarment order dated July 12, 2025, was passed without proper reasoning and without considering the detailed reply submitted by the petitioner — M/s Sudarshan Facilities Pvt Ltd.The dispute pertained to a security services contract awarded to the company in 2017. The contract remained in force till July 2020 after an extension, and PGIMER had also issued a satisfactory completion certificate to it in March 2020.However, in May 2024, the PGIMER issued a show-cause notice alleging that the company had failed to deposit applicable GST during the contract period, thereby violating Clause 12(k) of the agreement and Rule 151 of the General Financial Rules, 2017. Following this, the institute debarred the firm from future procurement processes for two years.In response, the company contended that the tender conditions clearly specified that the bid prices were exclusive of service tax, and GST was not part of the approved financial bid. The petitioner further alleged that the PGIMER initially paid GST for two months but later directed the company to remove GST from bills and subsequently recovered the GST amount that was already paid. The firm also claimed that the PGIMER withheld pending dues amounting to over ₹2.55 crore and retained a performance bank guarantee of ₹2.04 crore.While allowing the petition, the HC observed that the institute failed to deal with any of the specific grounds raised by the petitioner in its detailed reply. “None of the grounds specifically taken by the petitioner have been considered. No finding on the justification offered by the petitioner has been returned. The impugned order debarring or blacklisting the petitioner is bereft of any reasoning,” the bench observed.The court further remarked that blacklisting or debarment has serious consequences on the reputation and future business prospects of an entity.“The penalty of debarment/blacklisting results in civil death of an entrepreneur,” the bench said, adding that such a harsh penalty cannot be sustained unless imposed through a reasoned order.The HC accordingly quashed the impugned order and remitted the matter to PGIMER for fresh consideration in accordance with law.