GST detention and penalty cannot rest on technical lapses alone when no intent to evade tax is shown.

Under GST detention and penalty proceedings, technical defects in invoice or e-Way Bill compliance do not justify action unless the authority establishes a real intent to evade tax. Where the accompanying documents contained the relevant transaction details and the e-Way Bills were generated before the penalty order, the lapse was treated as a technical irregularity and the detention and penalty were held unsustainable. An appellate authority also cannot sustain such penalty without meaningfully addressing the taxpayer's explanation and the absence of any finding of evasion.

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Issues: (i) Whether penalty and detention under section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 were justified when the tax invoices contained the vehicle details and the e-Way Bills were generated before the penalty order was passed; (ii) Whether the appellate authority could sustain the penalty without addressing the petitioner's explanation and the absence of intent to evade tax.

Issue (i): Whether penalty and detention under section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 were justified when the tax invoices contained the vehicle details and the e-Way Bills were generated before the penalty order was passed.

Analysis: The documents accompanying the goods contained the relevant transaction particulars, including vehicle details, and the e-Way Bills were generated before the order imposing penalty was passed. The Court treated the lapse as a technical irregularity and held that, for proceedings under section 129, the crucial consideration is whether there was any intent to evade tax. As no discrepancy showing evasion was established, the detention and penalty could not be sustained.

Conclusion: The detention and penalty were unjustified and liable to be quashed.

Issue (ii): Whether the appellate authority could sustain the penalty without addressing the petitioner's explanation and the absence of intent to evade tax.

Analysis: The appellate order did not cure the foundational defect in the original order. The explanation regarding delayed generation of the e-Way Bill and the absence of any finding of tax evasion were not meaningfully dealt with. Since penalty proceedings require a cogent basis showing evasion, the appellate affirmation was unsustainable.

Conclusion: The appellate order was invalid and could not stand.

Final Conclusion: The impugned orders were quashed, the writ petition was allowed, and the amount deposited towards tax and penalty was directed to be refunded.

Ratio Decidendi: In proceedings for detention and penalty under the goods and services tax law, mere technical non-compliance will not justify penalty unless the authority establishes a real intent to evade tax.

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