Intention is an alchemic prescription that can turn base dirt into noble gold.

The hadith says "Allactions depends upon intentions."

It is sometimes interpreted to mean that good intentions justify bad deeds too and turn sins meritorious.

This is entirely wrong. Sin is always a sin no matter how noble the intention may be.

For instance if someone breaks into  house to steal with the intention of giving away as alms whatever he would steal would be a thief deserving the prescribed punishment.  

His good intentions would not earn hire any merit nor would his sin be pardoned.

What this hadith means is as follows:  A good deed earns merit only if done with right intention. For instance prayer would earn merit only when one prays only for Divine pleasure:

if one prays to impress others, then, instead of earning merit, it would earn punishment.