Under valuation disputes under Uttar Pradesh GST must follow Sections 73 or 74, not detention penalty under Section 129.

Alleged under valuation of goods, by itself, does not justify detention and penalty under Section 129 of the Uttar Pradesh GST Act, 2017. Where the dispute concerns valuation alone, the proper course is to invoke the assessment mechanism under Sections 73 or 74 by issuing the prescribed notice and following the statutory procedure. Detention and penalty cannot be used as a substitute for that process. On that basis, the penalty under Section 129 for under valuation was held unsustainable and the impugned orders were liable to be quashed.

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Issues: Whether penalty under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 could be sustained merely on the ground of alleged under valuation of goods, without following the procedure under Sections 73 or 74 of the said Act.

Analysis: Alleged under valuation is not, by itself, a valid basis for detention of goods and consequent penalty under Section 129. Where the dispute is only about valuation, the proper course is to proceed under Sections 73 or 74 of the Uttar Pradesh Goods and Services Tax Act, 2017 by issuing the prescribed notice and following the statutory procedure. Detention and penalty cannot be used as a substitute for the assessment machinery under the Act.

Conclusion: Penalty under Section 129 on the ground of under valuation was not sustainable and the impugned orders were liable to be quashed.

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