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6. At the relevant point of time, when this cross-LoC trade commenced, the intra-state sales tax was governed by the Jammu and Kashmir Value Added Taxes Act, 2005 ["the VAT Act, 2005"]. Section 55 of the VAT Act, 2005, which came to be amended on 7th February, 2012 categorically provided that the cross-LoC trade would be considered as a zero-rated sale. The cross-LoC trade was thus carried by the petitioners and other traders without payment of any sale or purchase tax.

7. However, in the year 2017, the GST regime was rolled out by the Government, and CGST Act, 2017 and J&K GST Act, 2017 were promulgated. Both the legislations came into operation with effect from 8th July, 2017. Admittedly, there was no provision under these legislations akin to Section 5 of the J&K VAT Act, 2005. The petitioners, as they claim, treated cross-LoC trade as a zero-rated sale, attracting no sale tax, did not indicate their cross-LoC transactions in their return, nor did they pay any sales tax on this account. This happened in the financial years 2017-2018 and 2018-2019.