The Andhra Pradesh High Court has clarified that authorities cannot withhold the release of a seized commercial vehicle solely on the grounds of unpaid full tax and penalty. In a significant procedural safeguard, the Court directed that 50% of the tax demand, along with compound fees, suffices for release pending enquiry, reinforcing the principle that detention must not be punitive without due process.
Background & Facts
The Dispute
The petitioner, Jagan Transports, operates a commercial vehicle bearing registration number NL02B 5557, registered in Nagaland. On 14.03.2026, the 3rd respondent, the Motor Vehicles Inspector, Tirupati, seized the vehicle for allegedly plying without a valid permit and without payment of road tax. A challan (No. AP 250219260314200156) was issued demanding Rs. 4,33,000 as tax and penalty, plus Rs. 1,500 as compounding fee. The petitioner was not provided any inspection report, enquiry record, or opportunity to be heard prior to seizure.
Key Facts
- The vehicle was seized on 14.03.2026 without a check report or formal enquiry.
- The petitioner had no opportunity to present evidence or contest the allegations before seizure.
- The demand for full tax and penalty was made under the pretext of non-compliance with the Motor Vehicles Act, 1988.
- The petitioner contended that the action violated GOMs No. 285 dated 15.09.1984, which permits release of seized vehicles on payment of 50% of the tax demand pending final adjudication.
- No notice under Section 130 of the Motor Vehicles Act was issued prior to seizure.
- The petitioner had previously paid taxes in Nagaland and was engaged in inter-state transport.
Procedural History
- 14.03.2026: Vehicle seized by Motor Vehicles Inspector, Tirupati.
- 15.03.2026: Petitioner submitted representations seeking release on payment of 50% tax as per GOMs No. 285/1984; no response received.
- 20.03.2026: Petitioner filed an application before the District Transport Officer seeking release; rejected on 25.03.2026.
- 28.03.2026: Writ Petition No. 8519/2026 filed before the Andhra Pradesh High Court under Article 226.
- 01.04.2026: Hearing conducted before Justice Venkateswarlu Nimmagadda.
The Parties' Positions
Petitioner: Argued that the seizure was arbitrary and violative of natural justice. Relied on GOMs No. 285/1984, which permits interim release on 50% tax payment. Contended that no statutory authority permits withholding the vehicle without a check report or enquiry. Cited Saleem Tours and Travels v. Joint Transport Commissioner as binding precedent.
Respondents: Did not dispute the seizure but argued that full tax and penalty must be paid before release, citing the seriousness of tax evasion. Claimed that GOMs No. 285/1984 was not mandatory but discretionary. Did not produce any evidence of inspection or enquiry.
Relief Sought
The petitioner sought:
- A writ of mandamus declaring the demand for full tax and penalty as illegal.
- Direction to release the vehicle upon payment of 50% tax and compounding fee as per GOMs No. 285/1984.
- Stay on further proceedings until enquiry is completed.
The Legal Issue
Whether the authorities can lawfully refuse to release a seized commercial vehicle unless the full tax and penalty are paid, in the absence of a check report or enquiry, and contrary to the settled practice under GOMs No. 285 dated 15.09.1984?
Arguments Presented
For the Petitioner
The petitioner relied on Saleem Tours and Travels v. Joint Transport Commissioner (2000(4) ALD 501), where the Division Bench of this Court held that detention of vehicles beyond a reasonable period without enquiry violates Article 14 and 21. It was argued that GOMs No. 285/1984, issued under Section 213 of the Motor Vehicles Act, provides a clear, binding procedure for interim release. The petitioner emphasized that the absence of a check report rendered the seizure procedurally defective. The demand for full payment was characterized as punitive and disproportionate.
For the Respondent
The Government Pleader contended that tax evasion is a serious offence and full payment must precede release to prevent revenue loss. It was submitted that GOMs No. 285/1984 was merely an administrative guideline and not a statutory mandate. No precedent or statutory provision was cited to support the position that full payment is mandatory.
The Court's Analysis
The Court observed that while the petitioner admitted to operating without a valid permit and tax payment, the manner of seizure and detention lacked procedural fairness. The Court noted that the respondents had not produced any inspection report, enquiry record, or order justifying the seizure under Section 130 of the Motor Vehicles Act. The Court emphasized that the power to seize is not a power to punish without due process.
"The State cannot hold a vehicle indefinitely as a coercive tool to extract full payment without conducting any enquiry or providing an opportunity of hearing."
The Court examined Saleem Tours and Travels and held that the precedent was squarely applicable: interim release on partial payment is not only permissible but necessary to balance state interest with individual rights. The Court further held that GOMs No. 285/1984, being a valid administrative order issued under statutory authority, is binding on transport authorities. The respondents’ reliance on discretion was rejected, as the order was not discretionary but procedural.
The Court also noted that the petitioner had no prior history of tax evasion and was engaged in legitimate inter-state transport. The refusal to release the vehicle on 50% payment was therefore arbitrary and violative of Article 14.
The Verdict
The writ petition is disposed of with the following directions:
- The respondents shall release the vehicle bearing No. NL02B 5557 seized on 14.03.2026 upon payment of 50% of the tax demand (i.e., Rs. 2,16,500) and the compounding fee of Rs. 1,500.
- The petitioner shall submit a demand draft or bank receipt evidencing payment to the 2nd respondent.
- The petitioner shall furnish a written undertaking that the vehicle will be produced before the authorities whenever required for enquiry and shall not be sold, transferred, or alienated pending final adjudication.
- There shall be no order as to costs.
- All pending applications are closed.
What This Means For Similar Cases
Interim Release Is a Right, Not a Concession
- Practitioners representing transporters can now assert the right to interim release under GOMs No. 285/1984 as a binding administrative rule.
- Authorities cannot demand full tax or penalty as a precondition for release.
- The burden shifts to the State to prove necessity for prolonged detention.
No Enquiry, No Detention
- Seizure without a check report or enquiry is procedurally invalid.
- Any detention beyond 48 hours without a formal enquiry order invites judicial intervention.
- Petitioners should immediately file writs if vehicles are held beyond 72 hours without documentation.
GOMs Are Binding Administrative Directives
- Government orders issued under statutory authority (e.g., Section 213 MV Act) are enforceable.
- Courts will treat such orders as procedural safeguards, not mere policy.
- Authorities cannot override GOMs by invoking discretion unless explicitly permitted by law.
