V.V.S. RAO, J :- lntroduction

The challenge in these cases is to Section 13(4) of the Andhra Pradesh Value Added Tax Act, 2005 (the VAT Act) and Rule 20(2)(h) of the Andhra Pradesh Value Added Tax Rules, 2005 (VAT Rules). The impugned rule was introduced by an amendment issued under Section 78(1) of the VAT Act by a Government notification vide G.O. Ms. No.220l, Revenue (CT-II), dated 29.12.2005. The effect of this rule is that all the petitioners, who are VAT dealers and availing Input Tax Credit (I.T.C.) in respect of coal, naphtha or natural gas under Section 13(1) of the VAT Act, have now been denied IT.C. retrospectively with effect from 1.4.2005. This is the grievance and grudge that forced the petitioners to approach this Court.

Background facts

2. We may notice the relevant facts and allegations from Writ Petition No.5080 of 2006. M/s. Vishnu Cement Limited a manufacturer of cement, is a registered dealer under the VAT Act. Limestone, coal, iron ore and gypsum are their main raw materials. In quant itative terms, coal constitutes 13% of the raw material and on clinker production 19% Under the provisions of the VAT Act, the tax paid on intra State purchase of raw ma