Gujarat High Court Rejects Writ Plea, Finds GST Officer Was Authorised To Verify Vehicle Carrying Goods

The Gujarat High Court has rejected Shreeji Steel's writ challenge to GST confiscation proceedings after finding that the officer who physically verified its vehicle was authorised under Rule 138B of the CGST Rules.

A bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati also held that the company had an alternative statutory remedy of appeal under Section 107 of the CGST Act.

The court observed, “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.”

Shreeji Steel, which trades in waste and scrap of cast iron, had purchased goods from A.S. Construction, Gandhidham. The goods were supplied directly to A.K. Tools Industries through a vehicle bearing registration number PB 13 BR 9947.

The vehicle was inspected by the State Tax Officer (1), Kachchh Mobile Squad, on February 13, 2025, at Radhanpar Highway near Samakhiyali. The authorities subsequently issued a physical verification report in Form GST MOV-04 and a detention order in Form GST MOV-06.

MOV-04 records physical verification of goods or a conveyance in transit, while MOV-06 is the detention order. A show-cause notice in Form GST MOV-10 was then issued under Section 130 of the CGST Act, proposing confiscation.

The proposed penalty was ₹2,47,466. The fine in lieu of confiscation of the goods was ₹13,74,812, while the proposed fine for the conveyance was ₹2,47,468.

The proceedings had earlier been challenged before the high court. After the matter was remanded for reconsideration, a fresh MOV-10 notice was issued on January 15, 2026. Shreeji Steel filed its reply on February 9, 2026, following which the authorities passed the final MOV-11 order on March 2, 2026.

Shreeji Steel argued that Rule 138B had been violated and that the same proper officer could not issue the notice and adjudicate the matter. It also contended that documents relied upon by the authorities had not been supplied, violating natural justice.

The Revenue opposed the plea, pointing out that Section 107 provides a statutory appeal against the adjudication order. It also submitted that A.S. Construction's registration had subsequently been cancelled and that physical verification found its office closed.

The court explained that Rule 138B permits the Commissioner or an officer empowered by him to authorise a proper officer to intercept a conveyance and verify the e-way bill. In cases involving specific information about tax evasion, another officer can conduct physical verification after obtaining the necessary approval.

The bench found that the officer who inspected Shreeji Steel's vehicle had the required authorisation. It therefore rejected the Rule 138B challenge.

The court also found no violation of natural justice. Forms GST MOV-04 and MOV-06 had been supplied to the person in charge of the conveyance, while MOV-10 was subsequently supplied to Shreeji Steel. Documents concerning cancellation of the supplier's registration were also supplied.

Shreeji Steel had also been given a personal hearing opportunity on January 22, 2026. It did not appear but filed a written reply, which was considered before the final order.

Relying on the Supreme Court's decision in Assistant Commissioner of State Tax v. Commercial Steel Ltd., the bench held that none of the exceptional circumstances warranting writ interference was present.

“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,” the court observed.

The high court accordingly dismissed the writ petition, leaving Shreeji Steel to pursue its statutory appeal under Section 107 of the CGST Act.

For Petitioner: Advocates Jatin Harjai withDhruv Chhajed, for Sujay Adeshra, with Jagrat B. Shah

For Respondent: Raj Tanna, AGP