Gilgit Baltistan declared independance from the Dogra regime before they ceded to Pakistan and hence do not consider themselves to be a part of Jammu and Kashmir.
At the time of the
alleged accession to India, Kashmir was, in effect, divided into three distinct sectors: Azad Kashmir, "Legal" Kashmir and the Gilgit region. (Now GB)
The Maharaja did NOT exercise sovereignty over Gilgit Region, which constituted one-third of Kashmir. By the 1890s, it was the British Agent at Gilgit who wielded the real authority there. In 1935, the British leased Gilgit from Kashmir for sixty years, but surrendered their lease on the eve of partition." In theory, sovereignty reverted to Kashmir, but the Maharaja was never able to make this sovereignty effective in any way. When the Maharaja sent a governor to Gilgit, the Gilgit Scouts imprisoned him and turned the territory over to Pakistan. In light of this fact, it is clear that the Maharaja did not perform the activities of a territorial sovereign in the Gilgit region.
As such, the Maharaja had never exercised sovereignty over the region, and as per international law, could not transfer more rights than he possessed. Therefore, India did not receive the Gilgit region, now possessed by Pakistan, under the Instrument of Accession
Under International Law, A state can intentionally acquire sovereignty over any such territory that is not under the sovereignty of another state. The occupied territory must have, been
terra nullius, without owner, and the occupation must have been real or "effective." ... Effective occupation occurs when there is an announced intention to acquire the territory, and actual settlement or occupation with the assertion of governmental authority has taken place.
The British surrendered their lease on the eve of partition, the Gilgit region was a terra nullius. At the time of accession, under the August 1947 Standstill Agreement, Pakistan alone was responsible for administering services in Kashmir such as the post, telegraph and railways. These services were the beginning of Pakistan's establishment of government authority over the region. This process was completed after the territory was transferred to Pakistan by the Gilgit Scouts. Since this time, Pakistan has claimed the Gilgit region, formerly a terra nullius, as part of its territory, keeping it beyond the control of the Azad Kashmir authorities and making it an integral part of Pakistan. In doing so, Pakistan has established governmental control sufficient to provide security to life and property. Thus, Pakistan effectively occupies the Gilgit region to the exclusion of India.
Pakistan's claim on GB is legally valid and justified. However, if (and when) needed, Pakistan is ready to hold a referendum in GB as well.