“Highly Improper": Karnataka High Court Quashes Seizure & RC Cancellation Of Mercedes In Tax Case, Says RTO Acted Beyond Authority

Criticising the unlawful seizure of a Mercedes vehicle and subsequent cancellation of its registration during the pendency of a writ petition against the seizure, the Karnataka High Court has come down on the state's RTO Department for 'flagrant disregard for court proceedings'. The court has directed the authority to restore the registration of the Mercedes-AMG G 63 vehicle in question.

The single judge bench of Justice Jyoti M has quashed the Investigation Report of Vehicle's seizure and the order of cancellation of the Registration Certificate as untenable in law. In June 2025, a special checking squad under the RTO had taken possession of the vehicle parked on the roadside, claiming non-payment of sufficient taxes as a reason.

“…. This Court finds such conduct on the part of the respondent authorities to be highly improper. Once this Court seizes of the matter and is pending adjudication, any precipitative action taken by the authorities affecting the subject matter of the writ petition is wholly unwarranted. This Court is constrained to observe that the cancellation of the vehicle registration during the pendency of the Writ Petition is legally untenable…”, the single judge bench accordingly observed that no such action could have been taken when the matter was sub judice.

“…It is to be noted that Mr Ranjit, an officer posted at the Bangalore (South) office, was merely assigned the responsibility of submitting a report under the supervision of the Regional Transport Officer, Mysore (West). However, he acted beyond the scope of his authority as though he himself were the Regional Transport Officer of Mysore (West), and had seized the vehicle before submitting the report”, the court observed.

This observation of Justice Jyoti M must be read in light of the statutory guidelines under Section 11A [Non-payment of tax] of the Karnataka Motor Vehicles Taxation Act, 1957 and Section 207 [Operational without valid documents] of the Motor Vehicles Act, (1988). Only the Regional Transport Officer (RTO) or an authorised Motor Vehicles Inspector is empowered to seize and detain a motor vehicle under specific statutory provisions, the court explained in the order.

Nihal Ahmed had originally purchased the vehicle, a Mercedes-AMG G 63, for Rs 1.96 crores. The RTO authorities contended that the vehicle was actually a high-value Mercedes-AMG G 63, but the sale certificate described it as a GLA 200 GDI. Nihal had allegedly manipulated the documents pertaining to the vehicle description, resulting in tax evasion to the tune of Rs 78.31 lakhs.

The scope of the seizing officer was limited to investigation and submission of a report to the RTO, even if the office memorandum instituting the special squad is taken into account, the court clarified.

“…when a statute confers a specific power upon a designated class of officers, the same cannot be exercised by any other person who is not expressly authorised”, the court said.

During the pendency of the current writ challenging the seizure, the RTO went on to cancel the vehicle registration in 2026, which the court found to be worth 'condemning'.

The court has asked the RTO to release the vehicle in custody and hand it over to the petitioner-owner. While allowing the writ petition by the vehicle owner, the court also deemed it appropriate to issue a reminder to the RTO officials:

“…officials of the RTO Department are not merely enforcers of statutory provisions but are representatives of the State in their dealings with citizens. Their conduct has a direct bearing on public confidence in governance. They are, therefore, expected to act with fairness, transparency, empathy, and a high sense of public duty”, the court added.

Adv H. Pavan Chandra Shetty represented the petitioner. Additional Advocate General V.G Bhanuprakash appeared for the state.

Case Title: Neeraj Kumar Sharma v. State of Karnataka & Ors.

Case No.: Writ Petition No. 36250 of 2025

Click Here To Read/ Download Order