Well if something is stopping security agencies doing there job and increase the price for the nation to act. If it comes under restoring public order. And if proper warning have been given and still few guys want to challenge there fate. They are more than welcome to do that.
It's not Kashmirs verses rest of India. It is national interest. Shoot on sight order can be and will be given if something can harm the society or National interest at large.
It happened in Punjab, It also happened in Gujarat when Shoot on sight orders were given and many other instances.
We can also take examples of Pakistan zarbe azar operation.