The petitioners had challenged show-cause notices issued under Section 74(1) of the CGST Act, alleging wrongful availment of exemptions. Authorities had raised GST demands on traders who participated in the barter trade.

The bench clarified the statutory position, ruling, “From reading of the intra-state supplies of goods and services, it is evident that where the location of supplier and the place of supplies of goods are in the same state or same Union territory, that shall be treated as intrastate supply.”

Reiterating the territorial position, the court added, “It is not disputed by learned counsel appearing on either side that the area of the state presently under de-facto control of Pakistan is part of territories of the state of Jammu & Kashmir. Therefore… the cross-LoC trade… was nothing but an intra-state trade.”

The court also said that the petitioners did not report these transactions despite the absence of any exemption notification.

The bench reiterated that while alternative remedies do not bar maintainability of writ petitions, courts may still decline intervention. It held that show-cause notices must be adjudicated by the competent authority, and cases with final demand orders must go through the appeal route under Section 107.

The petitions were dismissed as premature or covered by alternative statutory remedies, with the court’s finding on the intra-state nature of the trade declared binding on authorities.