Vehicle seizure for tax evasion without prior statutory notice and hearing is legally unsustainable.

The petitioner purchased a Lamborghini Huracan (manufactured in 2021) from an authorized dealer on September 1, 2025, for approximately ₹3.00 crores, paying relevant GST and road tax.

The vehicle was registered with the RTO, Indiranagar, on September 19, 2025.

On February 7, 2026, Respondent No. 2 (a Senior Motor Vehicle Inspector) registered a "Zero FIR" alleging that the petitioner and the dealer used forged documents to register the 2021 vehicle as a new 2025 model to evade tax.

Immediately following the FIR, Respondent No. 2 forcibly entered the petitioner’s premises and personally seized/towed the vehicle without prior notice or a hearing.

The petitioner sought quashing of the FIR (Crime No. 117/2026) and the release of the vehicle, arguing that the seizure violated the mandatory procedures under the Karnataka Motor Vehicles Taxation Act, 1957.

1. Whether the seizure of the vehicle by Respondent No. 2 was legally sustainable under the Karnataka Motor Vehicles Taxation Act, 1957.

2. Whether the criminal proceedings for cheating and forgery under the BNS are maintainable in light of the procedural violations by the authorities.

The court applied Sections 318(4) (cheating) and 336(3) (forgery for cheating) of the Bharatiya Nyaya Sanhita (BNS), 2023.

It primarily interpreted the Karnataka Motor Vehicles Taxation Act, 1957, specifically Section 8A, which mandates that the taxation authority must provide notice and an opportunity to be heard before recovering escaped tax.

Section 11A of the same Act, which restricts the power to seize and detain vehicles to instances where tax determination procedures have been scrupulously followed, characterizing seizure as a conditional power and a measure of last resort.

The court observed that the authorities inverted the statutory scheme; rather than determining tax liability and issuing a notice under Section 8A, Respondent No. 2 resorted to seizure at the very threshold.

The court characterized the conduct of Respondent No. 2—acting as both the complainant and the person effecting the seizure—as an "egregious abuse of authority" that overstepped the bounds of the law.

While the State Public Prosecutor alleged that RTO records were effaced to facilitate the fraud, the court noted that no RTO officials were made accused, only the car owner.

The court found that the seizure was unsustainable because it was not preceded by the procedural safeguards enshrined in Sections 8A and 11A of the Taxation Act.

It further rejected the State's argument that the petitioner must seek relief under Sections 497/503 of the BNSS, noting those provisions apply to stolen property, whereas the subject vehicle was lawfully registered and in the owner's possession.

It ordered the immediate release of the vehicle to the petitioner within one week.

However, the court reserved liberty for the State to initiate fresh proceedings strictly in accordance with the procedural safeguards of the Taxation Act if tax evasion is found.

Additionally, the court directed a departmental enquiry against Respondent No. 2 for flagrant disregard of the law.

Ordered the State to report on the investigation of RTO officials involved in the alleged record tampering within two months.