Transit goods penalty must match the actual GST infraction; higher clause under Section 129(1)(b) was unsustainable.

Where goods in transit were accompanied by an e-way bill and tax invoice, the penalty had to reflect the actual nature of the infraction proved. The Court held that the authority could not compute detention penalty under section 129(1)(b) of the Uttar Pradesh Goods and Services Tax Act, 2017 on those facts, and that the matter had to be reassessed under section 129(1)(a). The impugned penalty order was set aside, with release of the goods to follow on deposit of the penalty properly assessed under the correct clause.

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Issues: Whether the penalty for detention of goods accompanied by an e-way bill and tax invoice was liable to be computed under section 129(1)(a) or section 129(1)(b) of the Uttar Pradesh Goods and Services Tax Act, 2017.

Analysis: The goods were found accompanied by an e-way bill and tax invoice showing the relevant particulars, and the stated defect, if any, was at best one attracting penalty for non-compliance of the nature contemplated by section 129(1)(a). The computation adopted by the authority under section 129(1)(b) was therefore not sustainable. The proper course was to reassess the penalty in accordance with section 129(1)(a), with consequential relief regarding release of goods on deposit of the penalty so determined.

Conclusion: The impugned penalty order was set aside and the authorities were directed to determine penalty under section 129(1)(a) of the Uttar Pradesh Goods and Services Tax Act, 2017, with release of goods upon deposit of the amount so assessed.

Final Conclusion: The writ petition succeeded to the extent of correction of the penalty basis and consequential relief, while leaving open other disputes and statutory remedies, if any.

Ratio Decidendi: Where goods in transit are accompanied by the requisite invoice and e-way bill, the penalty must be aligned with the nature of the infraction actually established, and cannot be computed under a higher or inapplicable clause without legal basis.

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