Detention for alleged under-valuation is impermissible when GST valuation must be tested through Sections 73 or 74 procedure.

Goods accompanied by invoice, e-way bill and other supporting documents were not liable to detention merely because the invoice value was alleged to be understated, especially where there was no mismatch in the goods description and the governing circular disfavoured detention on under-valuation alone. Under-valuation must be examined through the notice and adjudication procedure under Sections 73 or 74 of the Uttar Pradesh GST Act, and Section 129 cannot be used as a substitute for that statutory process. On that basis, the detention and penalty orders were held unsustainable and consequential relief followed.

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Issues: (i) Whether goods could be detained and penalty imposed merely on the ground of under-valuation when the accompanying documents were in order. (ii) Whether penalty under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 could be sustained without following the procedure for under-valuation under Sections 73 or 74 of the Act.

Issue (i): Whether goods could be detained and penalty imposed merely on the ground of under-valuation when the accompanying documents were in order.

Analysis: The invoice, e-way bill and other relevant documents accompanied the goods, and there was no mismatch in the description of the goods. The only basis for detention was the alleged incorrect valuation in the invoice. The applicable circular also indicated that detention was not to be made on the ground of under-valuation alone.

Conclusion: Detention solely on the ground of under-valuation was not justified.

Issue (ii): Whether penalty under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 could be sustained without following the procedure for under-valuation under Sections 73 or 74 of the Act.

Analysis: Under-valuation is to be dealt with through notice and adjudication under Sections 73 or 74 of the Act. The power to detain goods and impose penalty under Section 129 cannot be exercised as a substitute for the statutory procedure prescribed for determining under-valuation.

Conclusion: Penalty under Section 129 could not be sustained on a mere allegation of under-valuation without recourse to Sections 73 or 74.

Final Conclusion: The impugned detention and penalty orders were held unsustainable and the writ petition succeeded with consequential relief.

Ratio Decidendi: Goods cannot be detained or penalised under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 merely on a speculative allegation of under-valuation when the statute provides a distinct procedure under Sections 73 or 74 for such determination.

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