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GST – Trade between India and Pakistan Occupied Kashmir (PoK) - Zero-rated Supply or Intra-State Sale - Applicability of GST on Cross-Line of Control (LoC) trade - The cross-LoC trade was regulated by a SOP issued by the Government of India, which was a barter trade between divided parts of the State of Jammu and Kashmir, without any exchange of currency. The petitioners treated the cross-LoC trade as a zero-rated supply, attracting no GST, and did not indicate these transactions in their returns or pay any GST on their outward supplies during the cross-LoC trade of goods to PoK and also on the inward supplies received from PoK – Revenue of the view that supplies to and from PoK in pursuance of cross-LoC trade conducted as per SOP 2008, are intra-State and taxable under GST - Whether the cross-LoC trade regulated by the SOP is an intra-State trade and therefore, amenable to the provisions of the GST Act – HELD – In terms of Section 2(64) of the CGST Act of 2017 and Section 8 of the IGST Act, 2017, 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 intra-State supply. It is not disputed by Ld. Counsels 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, in the instant case the location of the suppliers and the place of supply of goods were within the then State of Jammu Kashmir (now Union Territory) and, therefore, the cross-LoC trade affected by the petitioners during the tax period in question was nothing but an intra-State trade and therefore, liable to GST - In respect of impugned show cause notices, the petitioners have a remedy to file their reply, submit requisite material and contest these on merits. In view of availability of equally efficacious remedy provided under the statute, these petitions are not entertainable and the petitioners are relegated to statutory remedies available under the CGST Act of 2017 – The writ petitions are dismissed - Suppression of facts - Whether the impugned show cause notice is essentially a notice under Section 73(1) or a notice under Section 74(1) of the CGST Act – HELD – If the evasion of tax has taken place because of fraud or any willful mis-statement or suppression of facts, Section 74 would be attracted and if there is evasion of tax for any other reason, Section 73 – The petitioners were well aware that there was no specific notification issued by the Government under Section 11 of the CGST Act of 2017 exempting cross-LoC barter trade from payment of GST. They were also aware that these supplies whether inward or outward were intra-State supplies and subject to GST in terms of Section 7 of the CGST Act 2017. It was the responsibility of the petitioners to self-assess and discharge their GST liability at the time of filing GST returns properly - In the present case, the impugned show cause notice is prima facie a notice under Section 74(1) of the CGST Act, as it indicates suppression of facts and information by the petitioners, and their deliberate non-cooperation with the investigation. The proper officer to independently adjudicate this aspect based on the material placed before it and the reply, if any, submitted by the petitioners - Whether the impugned show cause notice is barred by the limitation prescribed under Section 74(2) read with Section 74(10) of the CGST Act – HELD - The notices impugned were issued to the petitioners at least six months prior to the expiry of five years from the date due for furnishing the annual return for the financial years in question. Therefore, the impugned show cause notices were issued well within the time limit prescribed under Section 74(2) and Section 74(10) of the CGST Act and are not barred by limitation - Whether the bunching of show cause notices pertaining to two financial years (2017-2018 and 2018-2019) is permissible under the CGST Act – HELD - From the reading of entire CGST/JKGST Act, one would not find any prohibition for issuing one composite show cause notice for multiple financial years. The bunching of show cause notices pertaining to multiple financial years is permissible under the CGST Act/J&K GST Act, provided that the requirements of Sections 73 and 74 are met, such as there is year-wise breakup of tax, interest and penalty; the allegations are not vague; each period is within limitation and the notice is speaking and detailed one - In the instant case, it cannot be said that the bunching of composite SCN issued in respect of tax periods falling in year 2017-2018 and year 2018-2019 is impermissible and liable to be interfered with.
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