GST detention for clerical e-way bill error fails where genuine transport documents exist and no tax evasion is found.

Detention and penalty under the Uttar Pradesh GST Act were considered unsustainable where goods were transported with delivery challan, e-way bill, and other genuine transport records, and the only defect was a technical error in the e-way bill's place of dispatch. The governing principle stated was that detention and penalty of this nature require a finding of tax evasion or attempted evasion; a mere clerical or procedural mistake, without any recorded intention to evade tax, is insufficient. On that basis, the detention, penalty, and appellate orders were quashed.

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Issues: Whether detention and penalty proceedings under the Uttar Pradesh Goods and Services Tax Act, 2017 were sustainable where the e-way bill contained a technical error in the place of dispatch, the goods were accompanied by genuine transport documents, and no finding of intention to evade tax had been recorded.

Analysis: The goods were found to have been moved for exhibition with delivery challan, e-way bill, and material entry and exit slips, and the only discrepancy was an entry of the place of dispatch in the e-way bill. The record did not contain any finding that the petitioner intended to evade payment of tax. The governing principle applied was that penalty proceedings of this nature require a finding of evasion or attempted evasion, and a mere procedural or clerical defect in documents, without mens rea, is insufficient to justify detention or penalty.

Conclusion: The detention, penalty, and appellate orders were unsustainable and were quashed, with the writ petition allowed.

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