Strangely enough, and probably much to the surprise of the other gamers in this particular group, I am going to side with the Pally on this one.
The Pally in question follows the God of Nature. This is a homebrew setting and does not form one of the pre-cut official campaign settings.
One of the essential tenets of the faith of the God of Nature is effectively: Law of the Jungle. The strongest shall survive. This lawman is not a disciple of the God of Law - bound to uphold the institutions of law, but only the law itself.
The Pally sees it pretty plainly. He IS the law. He IS Judge Dredd, for want of a more appropriate metaphor.
The situation is summed up pretty quickly. We are outside the city-state, but we are within the realm. Conclusions are drawn about how a goblin could afford to purchase the items that he is purportedly selling, or how he could possibly brew the items in question. No logical answer exists. Conclusive evidence? No. Pretty substantial circumstantial evidence, yes.
Did the Pally in question use his 'Detect Evil' ability beforehand? I don't believe so.
But in any event, he has upheld the tenets of his faith - Law of the Jungle. So Lawful.
Good you ask? Greater good in these circumstances. How did the goblin acquire the materials? Has he been involved in or complicit in the murder or thievery of others to acquire these items? Quite probably. Will the world be a safer place without such villiany in the realm, absolutely. Has the strongest prevailed in this circumstance, to the benefit of the Jungle? Putting flamesuit on here, yes.
If it were a human brigand on the highway doing exactly the same thing? Same result. Race isn't the issue.
P.S. Do I think the player involved has deliberately taken a Pally, and taken these actions, just so he can play with people's thoughts on the whole notion of alignment? Abso-f*&%ing-lutely.