SC issues notice to Cross LOC supply treated as Intra state supply

The Jammu & Kashmir and Ladakh High Court examined a batch of writ petitions challenging GST show cause notices issued under Section 74 of the CGST Act in relation to cross-Line of Control (“LoC”) barter trade between Jammu & Kashmir and Pakistan Occupied Kashmir. 

The Court held that such trade constitutes an intra-State supply under the GST framework, that proceedings under Section 74 could not be held without jurisdiction at the notice stage, and that composite show cause notices covering multiple financial years are not inherently invalid. 

The Court ultimately dismissed the writ petitions and directed the petitioners to pursue the remedies available under the GST statute. Subsequently, the Supreme Court issued notice in the Special Leave Petitions filed against the High Court judgment and tagged the matter with connected proceedings.