N.Y. Tax Law § 1848: Forfeiture action with respect to motor fuel and diesel motor fuel and vehicle carrying such fuel

§ 1848. Forfeiture action with respect to motor fuel and diesel motor

fuel and vehicle carrying such fuel.

(a) Temporary seizure. Whenever a police officer designated in section

1.20 of the criminal procedure law or a peace officer designated in

subdivision four of section 2.10 of such law, acting pursuant to his

special duties, shall discover any motor fuel or diesel motor fuel which

is being imported for use, distribution, storage or sale in the state

where the person importing or causing such motor fuel or diesel motor

fuel to be imported is not registered as a distributor under section two

hundred eighty-three or section two hundred eighty-two-a, of this

chapter, as the case may be, such police officer or peace officer is

hereby authorized to seize and take possession of such motor fuel or

diesel motor fuel, together with the vehicle or other means of

transportation used to transport such motor fuel.

(b) Retention of property. The department shall hold and safely keep

such motor fuel, diesel motor fuel, vehicle or other means of

transportation seized pursuant to subdivision (a) of this section.

Seized motor fuel or diesel motor fuel may be deposited to the credit of

the department at a terminal or other storage facility within the state

or may be sold by the department on the open market.

(c) Confirmation of temporary seizure. Within five business days after

the temporary seizure of motor fuel, diesel motor fuel, vehicle or other

means of transportation pursuant to subdivision (a) of this section, the

department shall move in supreme court in any county, on such notice as

the court shall direct to the owners of the property, to confirm the

temporary seizure. If the department fails to make such motion within

the required period, such seized property shall be restored to the

owners thereof as provided in subdivision (e) of this section. On a

motion for an order confirming the seizure, the department shall show,

by affidavit and such other written evidence as may be submitted, that

there is a cause of action for forfeiture under subdivision (d) of this

section and that there are grounds for confirmation of the seizure. The

department shall include, in its motion papers, an inventory of all

seized property. The court shall grant an application for an order

confirming the seizure when it determines that there is a substantial

probability that the department will prevail on the issue of forfeiture.

(d) Forfeiture action. (1) A forfeiture action shall be commenced

within forty-five days from the date of the seizure. Such action shall

be commenced by service of a summons with notice or summons and

complaint in accordance with the methods authorized by the civil

practice law and rules or the business corporation law with respect to

personal service of a summons. Upon such terms as may be just and upon

good cause shown the court may extend the time, not exceeding thirty

days, within which the summons must be served, provided that the

application for extensions made before the expiration of the time fixed.

If the department fails to commence the forfeiture action within the

required period, such seized property shall be restored to the owners

thereof as provided in subdivision (e) of this section.

(2) A forfeiture action under this subdivision shall be commenced in

supreme court. The proper venue for trial of an action for forfeiture is

the county in which the temporary seizure authorized by subdivision (a)

of this section occurred.

(3) Forfeiture of motor fuel or diesel motor fuel together with the

vehicle or other means of transportation used to transport such motor

fuel or diesel motor fuel shall be adjudged where the department proves,

by clear and convincing evidence, that the person importing or causing

such motor fuel or diesel motor fuel to be imported was not registered

as a distributor under section two hundred eighty-three or section two

hundred eighty-two-a of this chapter, as the case may be. All defendants

in a forfeiture action brought pursuant to this article shall have the

right to trial by jury on any issue of fact.

(4) The court in which a forfeiture action is pending may dismiss said

action in the interests of justice upon an application as provided for

herein.

(A) At any time during the pendency of a forfeiture action, the

department of taxation and finance or a defendant may apply for an order

dismissing the complaint and terminating the forfeiture action in the

interest of justice.

(B) Such application for the relief provided in subparagraph (A)

hereof must be made in writing and upon notice to all parties. The court

may, in its discretion, direct that notice be given to any other person

having an interest in the property.

(C) An application for the relief provided for in subparagraph (A)

hereof must be brought exclusively in the supreme court in the county in

which the forfeiture action is pending.

(D) The court may grant the relief provided in subparagraph (A) of

this paragraph if it finds that such relief is warranted by the

existence of some compelling factor, consideration or circumstance

demonstrating that forfeiture of the property or any part thereof, would

not serve the ends of justice. Reporting and payment of the tax imposed

pursuant to article twelve-A or article twenty-eight of this chapter

with respect to such motor fuel or diesel motor fuel subsequent to the

seizure of such fuel shall not constitute a compelling factor,

consideration or circumstance warranting the granting of the relief

provided for in subparagraph (A) of this paragraph. In determining

whether such relief is warranted by the existence of some compelling

factor, consideration or circumstances pursuant to this paragraph, the

court may, however, take into account the fact that such taxes with

respect to the seized fuel have been reported and remitted to the state

prior to the temporary seizure of such fuel if the unregistered

importation into the state was effected in good faith and without

knowledge of the requirement of registration and without intent to evade

tax. The court must issue a written decision, stating the basis for an

order issued pursuant to this paragraph.

(5) An action under this subdivision shall be stayed during the

pendency of a criminal action which is related to it; provided, that

upon motion of a defendant in the forfeiture action or the department of

taxation and finance, a court may, in the interest of justice and for

good cause, and with the consent of all parties, order that the

forfeiture action proceed despite the pending criminal action; and

provided that such stay shall not prevent the granting or continuance of

an order confirming the seizure provided under this section.

(6) The total that may be recovered shall not exceed the value of the

motor fuel or diesel motor fuel seized and, in addition, either the

value of the vehicle or other means of transportation used to transport

such fuel or three times the amount of the tax and penalty under

articles twelve-A, thirteen-A and twenty-eight and pursuant to the

authority of article twenty-nine of this chapter with respect to the

motor fuel or diesel motor fuel, whichever is less.

(e) Return of property. If (1) the department fails to move for

confirmation of the seizure pursuant to subdivision (c) of this section

or (2) a court denies an application for an order confirming the seizure

or (3) judgment is entered against the department in the forfeiture

action and that judgment is affirmed after all appeals are exhausted,

then the department shall restore such seized motor fuel or diesel motor

fuel, or motor fuel or diesel motor fuel of a like quantity and type, or

such seized vehicle or other means of transportation to the owners

thereof. Alternatively, if such seized motor fuel or diesel motor fuel

has been sold as provided in subdivision (b) of this section, the

department shall pay to the owners of such motor fuel or diesel motor

fuel the proceeds of such sale or, if greater, an amount of money

representing the fair market value of the motor fuel or diesel motor

fuel at the time of the seizure.

(f) Release of property. A person whose property has been seized may

move, upon notice to the department of taxation and finance, in the

supreme court in any county, provided that if the department shall have

moved to confirm the temporary seizure of such property, in the supreme

court of such county for an order releasing all or part of the property

seized upon payment of the department's fees and expenses, if any. On

such a motion, the defendant shall give an undertaking in accordance

with article twenty-five of the civil practice law and rules, in an

amount equal to the value of the property sought to be released, that he

will pay the department the value of such property which may be adjudged

forfeited (but in the case of the owner of a vehicle or other means of

transportation, the amount of the undertaking required shall not exceed

three times the amount of all taxes and penalties due under articles

twelve-A, thirteen-A and twenty-eight and pursuant to the authority of

article twenty-nine of this chapter).

(g) Disposal of property. The department, after a judicial

determination of forfeiture, shall, in its discretion, either retain

such seized property for its official use or sell such forfeited

property at public sale. The net proceeds of any such sale, or of any

sale of seized motor fuel or diesel motor fuel as provided in

subdivision (b) of this section, after deduction of the lawful expenses

incurred, shall be deposited and disposed of pursuant to the provisions

of section one hundred seventy-one-a of this chapter with respect to

deposit and disposition of revenue.

(h) Wrongful seizure. A defendant in a forfeiture action may recover

in an action for wrongful seizure all costs and damages, including

reasonable attorneys' fees, which may be sustained by reason of the

seizure if the defendant recovers judgment in the forfeiture action, or

if it is finally decided that there was no justification for the

seizure. In order to establish a claim for wrongful seizure, the

defendant must establish by a preponderance of the evidence that the

seizure was made without reasonable cause and not in good faith. An

action for wrongful seizure under this subdivision shall be the

defendant's exclusive remedy in connection with seizures made under this

section. No suit or action for wrongful seizure under this section shall

be instituted unless such suit or action is commenced within two years

after the time when the property was seized.

(i) The remedies provided to the department of taxation and finance by

this section shall be in addition to any other remedies provided by law.

(j) An action under this section is civil and remedial and shall not

be deemed to be a penalty or criminal forfeiture for any purpose. Except

as otherwise provided by statute, the proceedings under this section

shall be governed by the civil practice law and rules. An action under

this section is not a criminal proceeding and shall not be deemed to be

a previous prosecution under article forty of the criminal procedure

law.