Karnataka High Court on Unlawful Seizure of Lamborghini: Procedure Under Taxation Law is Mandatory

The Karnataka High Court in H1 Car Care Vs State of Karnataka & Others examined the legality of criminal proceedings and seizure of a high-end car — a Lamborghini Huracan — in the context of alleged tax evasion and forgery in registration records.

The Court:

  • Quashed the FIR in Crime No. 117 of 2026 against the purchaser
  • Directed that the seized vehicle be released to the registered owner
  • Ordered a departmental enquiry against the Senior Motor Vehicle Inspector (2nd respondent)
  • Recorded an undertaking that action would be taken against concerned RTO officials
  • Crucially, kept open the State’s right to initiate fresh, lawful proceedings for tax or other violations, in strict compliance with statutory safeguards

The judgment provides an important exposition on how enforcement powers under the Karnataka Motor Vehicles Taxation Act, 1957 must be exercised and how criminal law cannot be used to bypass due process.

Background: Purchase and Registration of the Lamborghini

Acquisition of the Vehicle

  • The petitioner, H1 Car Care, represented by its proprietor J. Ramakrishnaiah, purchased a black Lamborghini Huracan (Chassis No. ZHWEF4ZF3MLA16940, Engine No. DGF008769) from Hoysala Automotive Private Limited on 01-09-2025.
  • The purchase consideration was ₹3,00,68,729.
  • The vehicle was manufactured in 2021.

According to the petition:

  • The distributor informed the petitioner that the car had earlier been sold in 2022 to M/s Harrsha Infra Cons Private Limited with a temporary registration and permission for permanent registration in the State of Telangana.
  • The earlier purchaser allegedly did not complete permanent registration and returned the car to the dealer.
  • The dealer then used the vehicle as a demonstration car before later selling it at a lower price to the petitioner.
  • The car was subsequently registered as a new vehicle in the name of the petitioner with registration number KA03NX0016, with registration date 19-09-2025, while the manufacturing date remained February 2021.

The assessee had a taxation card and a valid registration certificate in his name.

Allegations by the Authorities

Authorities alleged that:

  • Fabricated or false documents were used to secure registration of the vehicle as a new vehicle in 2025
  • Earlier records of the vehicle in the Regional Transport Office database were deleted or altered
  • This allegedly caused loss of revenue to the State due to incorrect tax computation based on misleading records

On this basis, a criminal case was registered for offences under:

  • Sections 318(4) and 336(3) read with Section 3(5) of the Bharatiya Nyaya Sanhita (BNS)
    • These correspond broadly to cheating and forgery for the purpose of cheating, with common intention (parallels of Section 420 and Section 468 under the earlier IPC regime).

The Senior Motor Vehicle Inspector (2nd respondent):

  • Lodged the complaint
  • Entered the petitioner’s premises on 07-02-2026 when the petitioner was out of station
  • Seized and towed away the vehicle himself, without prior notice or prior determination of tax liability
  • Placed the vehicle in the custody of Yelahanka New Town Police Station

The alleged differential tax demand was ₹60,08,734 as per the material on record.

The assessee approached the jurisdictional Magistrate under Sections 497 and 503 of the BNSS for release of the vehicle, but the application was rejected on 18-02-2026, after the State objected, citing the need to investigate alleged fabrication and tax evasion.

Interim Observations by the High Court

In an earlier interim order dated 12-02-2026, the High Court: