Supreme Court To Examine Validity Of Bihar Prohibition & Excise Act Provision On District Collector's Powers To Confiscate Property

The Supreme Court will soon examine the validity of Section 58 of the Bihar Prohibition and Excise Act, 2016, which deals with a District Collector's powers of confiscation of property related to offenses under the Act.

A bench of CJI BR Gavai and Justices K Vinod Chandran, NV Anjaria recently issued notice on a petition filed by the State of Bihar challenging a Patna High Court decision which held that seizure of the respondent's vehicle and its auctioning at "throwaway prices" was harsh and directed payment of Rs.1,65,000 to him by the state.

Vide the impugned order, the High Court further deprecated the practice of "wholesale" valuation of vehicles by Motor Vehicle Inspectors in Bihar, without there being any individualized and thorough assessment.

Staying the High Court's direction for payment by the valuer, the Supreme Court ordered,

"Issue notice, since we are inclined to consider the question with regard to validity of Section 58 of the Bihar Prohibition and Excise Act, 2016 read with Rules 12 A and 12 B of the Bihar Prohibition and Excise Rules, 2021."

Briefly put, the respondent had approached the High Court assailing confiscation of his Tata Safari car on allegations of involvement in an offence under the Excise Act. The case was registered in 2020, after the seized vehicle was found carrying six 180 ml bottles of Royal Stag.

The confiscation proceeding concluded in 2021 and the respondent failed in both challenges that he preferred against the result (before the Appellate Authority and in Revision). As such, his vehicle was auctioned in 2022.

Based on the material, the High Court noted that the vehicle was purchased in 2013 (valued approx. @ Rs.14 lakhs). On the date of the alleged offense, it was 7 years old. The ADTO, Bhojpur's initial valuation, as in 2021, was Rs. 3,20,000/- but the vehicle was auctioned for Rs. 1,85,000/-.

The High Court deprecated the "random" valuation of the vehicle, saying, "there is no individual vehicle's assessment as to how he has come to the conclusion that value of the subject matter of vehicle is at Rs. 3,20,000/- and thereafter, what is the basis to draw inference that auction price would be Rs. 1,85,000/-...not even reference to value of the vehicle purchased and depreciation year wise with reference to any policy or the Government or General Insurance Company. In the absence of assessment and randomly evaluation of vehicle in wholesale is highly deprecated."

The Court further remarked that bureaucrats of the state cannot value properties and auction them based on naked eye view. "...property cannot be valued with the naked eye by the bureaucrats of the State of Bihar and proceed to undertake auction and causing the state exchequer under loss and for the concerned person. In almost each and every case Motor Vehicle Inspectors are evaluating valuation of the vehicle in wholesale without there being individual assessment of the vehicle or property with reference to evaluation like date of purchase and value of what would be value as on the date of seizure of the vehicle and on the date of auction."

At last, the High Court held the respondent entitled to Rs.3,20,000 (initial valuation amount in 2021) but deducted Rs.20,000 as penalty. The ADTO was directed to pay Rs.1,35,000 to the respondent for irregularity in valuation of the vehicle and the State was ordered to pay Rs.1,65,000.

Case Title: THE STATE OF BIHAR & ORS. VERSUS SHANKAR BARANWAL, SLP(C) No. 20640/2025

Click here to read order