THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.24029 of 2006 Dated:29.11.2010 Between: M/s.IBP Co.Limited. …Petitioner and The Assistant Commissioner (CT) LTU, Secunderabad Division, Secunderabad, And others. …Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.24029 of 2006 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) The petitioner is a Government of India Oil Marketing Company having business in the State of Andhra Pradesh. They are dealers on the rolls of the first respondent under the Andhra Pradesh Value Added Tax Act, 2005 (VAT Act). Being aggrieved by the proceedings dated 11.10.2006 of the Additional Commissioner (CT) Legal, refusing to stay collection of the disputed tax of Rs.90,98,638/- pending appeal before the Appellate Deputy Commissioner (now the appeal is pending before the Sales Tax Appellate Tribunal (STAT)), they filed the instant writ petition. In the impugned order the Additional Commissioner, the third respondent herein, placed reliance on Rule 20(2)(p) of the Andhra Pradesh Value Added Tax Rules, 2005 (the Rules), which is indisputably made in exercise of the powers under Section 13(4) read with Section 78 of the VAT Act. In effect, by reason of inclusion in the negative list under Rule 20(2) of the Rules, the sales or purchases of kerosene meant for public distribution system attracts 4% tax, but the tax paid on such purchases cannot be allowed to be deducted as input tax. Therefore, the petitioner also assails Section 13(4) of the VAT Act and Rule 20(2)(p) of the Rules. Counsel for the petitioner has brought to our notice the clarification, purportedly issued under Section 76(2) of the VAT Act, by the Commissioner of Commercial Taxes. The same, being CCT’s Ref:-A-III(2)/200/2007, dated 31.12.2007, is to the effect that the first sale of kerosene oil by a manufacturer or an oil company to another oil company shall be liable to tax at the rate of 12.5%; when the oil company sells kerosene to other oil company the tax paid shall be eligible for claiming credit, but when the oil company sells kerosene to wholesale dealers for the purpose of sale through the public distribution system, the oil company shall be liable to tax at 4% and can claim the input tax credit at 12.5% in the State. Apart from the question whether the clarification issued by the Commissioner can be sustained in the face of Rule 20(2)(p) of the Rules, the very applicability of the said clarification can as well be a contentious issue before the STAT. Therefore, we decline to go into the question. While leaving the question of vires of Rule 20(2)(p) of the Rules open, we are inclined to relegate the petitioner to STAT before whom the appeal is pending. In so far as the challenge to Section 13(4) of the VAT Act is concerned, this Bench has already heard a batch of cases and the judgment is reserved. In the result, the writ petition is disposed of observing that the STAT may dispose of the appeal as expeditiously as possible, within a period of eight weeks from the date of receipt of a copy of this order. Liberty is reserved to the petitioner to challenge the vires of Rules 20(2)(p) of the Rules in appropriate separate proceedings. It appears, the petitioner has already complied with the condition imposed by this Court while staying the collection. As there is a stay in favour of the petitioner from November 2006, we do not see any strong reason to discontinue the benefit of stay of collection to the petitioner. We accordingly order the same to continue till the matter is disposed of by STAT. There shall be no order as to costs. _______________ (V.V.S.RAO, J) _____________________________ (RAMESH RANGANATHAN, J) 29.11.2010 vs