Overview
- A division bench of Justices Sanjeev Kumar and Sanjay Parihar held that areas under Pakistan’s de facto control legally remain part of Jammu and Kashmir, making 2017–2019 LoC exchanges intra-state supplies.
- The court dismissed writ petitions challenging GST show-cause notices as premature and directed petitioners to respond and, if needed, appeal under Section 107 of the CGST Act.
- Use of Section 74(1) was upheld where non-disclosure in returns indicates suppression, and composite notices covering 2017–18 and 2018–19 were found permissible.
- The bench reserved for adjudication the issues of barter valuation and whether equal exchanges can draw tax on both inward and outward supplies.
- Cross-LoC trade ran under a 2008 SOP on a barter basis and was halted in 2019 after Pulwama, with the court noting traders had to self-assess GST in the absence of any exemption.