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The Gujarat High Court dismissed Shreeji Steel’s challenge to GST confiscation proceedings, finding, according to the case report, that the officer who physically verified its goods-carrying vehicle had the Commissioner’s authorisation required under Rule 138B. The bench also said the company had an available statutory appeal under Section 107 of the CGST Act and found no reported basis for writ intervention. The ruling concerns the facts reported in this case; it does not give every GST officer blanket authority to inspect any vehicle.
What the Gujarat High Court decided
In Shreeji Steel v. State Tax Officer (1), Kutch Mobile Squad, R/Special Civil Application No. 10249 of 2026 (reported as 2026 LLBiz HC (GUJ) 145), a bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati dismissed the company’s writ petition. LiveLawBiz’s 3 October 2026 report says the court found that the officer who physically verified the conveyance was authorised by the Commissioner under Rule 138B of the CGST Rules.
The bench also reportedly rejected the company’s natural-justice objections on the record described in the report and concluded that the circumstances did not warrant writ-court intervention. The report says the statutory appeal under Section 107 remained open. The full-text order was not available for independent review here, so the case-specific account below follows the published report rather than an independently examined judgment.
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How the vehicle inspection led to the petition
Shreeji Steel, described in the report as a trader in cast-iron waste and scrap, had purchased goods from A.S. Construction in Gandhidham for direct delivery to A.K. Tools Industries. A State Tax Officer (1) of the Kachchh Mobile Squad inspected the vehicle carrying the goods near Samakhiyali on 13 February 2025.
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- Physical verification: The authorities prepared Form GST MOV-04, the physical verification report, and issued Form GST MOV-06, the detention order.
- Proposed confiscation: They later issued a Form GST MOV-10 show-cause notice proposing confiscation under Section 130 of the CGST Act. After an earlier remand, a fresh notice was issued on 15 January 2026.
- Reply and order: Shreeji Steel submitted a written reply on 9 February 2026. The final Form GST MOV-11 order was passed on 2 March 2026.
The fresh MOV-10 notice reportedly proposed a penalty of ₹2,47,466, a fine of ₹13,74,812 in lieu of confiscation of the goods, and a fine of ₹2,47,468 for the conveyance. These are amounts proposed in the notice, not figures that should be described as the final assessed liability. The report separately states that a later MOV-11 order was passed, but the figures above describe the MOV-10 proposal.
Why the court found the officer was authorised
Shreeji Steel argued that the physical verification did not comply with Rule 138B. The bench reportedly rejected that challenge after finding that the inspecting officer had the required authorisation from the Commissioner. The report attributes this statement to the bench: “Upon examination of the documents on record, we find that there is no violation of the said provisions, as the physical verification of the conveyance was carried out by the proper officer authorised by the Commissioner.”
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Rule 138B is not a general permission for any officer to stop and physically inspect any goods vehicle without meeting the applicable requirements. The GST Council-hosted NACIN guide to the electronic way bill system describes a framework in which the Commissioner, or an officer empowered by the Commissioner, may authorise interception of conveyances and verification of e-way-bill documents. It also describes physical verification by an authorised proper officer, with a specific conveyance potentially checked on specific information about tax evasion after the required approval.
That guide explains the general framework; it predates this ruling and is not a substitute for checking the current CGST Rules, notifications and forms. Its explanation also says Rule 138 generally requires e-way-bill information for movement of consignments above ₹50,000, subject to exceptions and qualifications. Do not treat that threshold as a universal statement of the current rule without checking amendments and the circumstances of a particular movement.
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Why the bench rejected the natural-justice challenge
The company reportedly argued that relied-upon documents had not been supplied and objected to the same proper officer issuing the notice and adjudicating it. According to LiveLawBiz, the court found no breach of natural justice on the record before it:
- MOV-04 and MOV-06 had been supplied to the person in charge of the conveyance.
- MOV-10 and material concerning cancellation of the supplier’s registration had been supplied to Shreeji Steel.
- The company was offered a personal hearing on 22 January 2026. It did not attend, but filed a written reply that was considered.
The bench reportedly found that these circumstances did not establish a natural-justice violation. That conclusion is tied to the facts described in the report, including which documents were supplied and the opportunity to respond; it should not be read as resolving every possible objection to document disclosure or adjudication by the same officer.
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Why a writ petition was not the route the company could pursue here
The Revenue pointed to the statutory appeal under Section 107 of the CGST Act. Relying on the Supreme Court’s decision in Assistant Commissioner of State Tax v. Commercial Steel Ltd., the Gujarat High Court reportedly found no exceptional circumstance warranting writ intervention in this case. The report attributes this conclusion to the bench: “We do not find any breach of fundamental rights, violation of the principles of natural justice, excess of jurisdiction, or challenge to the vires of the statute.”
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The petition was dismissed, while the Section 107 appeal route remained open. The reported decision therefore does not establish that a writ petition can never be brought in a GST matter; it records the bench’s conclusion that the grounds reported in this case did not justify bypassing the statutory appeal.
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What businesses can take from the ruling
For businesses moving goods, the decision is a reminder that the legal significance of a roadside inspection can turn on its documentation and the subsequent process, not merely on the fact that a vehicle was stopped. When reviewing a similar matter, the issues to check include:
- Whether the inspecting officer’s authorisation or any required approval is documented.
- Whether the stated basis for interception and verification is recorded, including any specific information relied on.
- Which verification and detention forms were issued, and whether the documents relied on were supplied to the relevant party.
- Whether the taxpayer had a meaningful opportunity to reply or attend a hearing and whether its response was considered.
- Whether a statutory appeal is available and the applicable steps and deadlines for using it.
These are practical reading points drawn from the issues in this reported case, not a formal checklist set out by the court. For the exact reasons, operative directions and any appeal-specific consequences, consult the full order and current law; the linked judgment text was not available for independent review in this account.
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