(a)(1) Any cigars or cigarettes found at any place in this state without stamps affixed to them as required by this chapter are declared to be contraband articles and may be seized by the commissioner, his agents or employees, or any peace officer of this state when directed by the commissioner to do so.

(2) Paragraph (1) of this subsection shall not apply when:

(A) The tax has been paid on the unstamped cigars and little cigars in accordance with the commissioner's regulations promulgated pursuant to Code Section 48-11-3;

(B) The cigars or cigarettes are in the possession of a licensed distributor;

(C) The cigars or cigarettes are in course of transit from outside the state and are consigned to a licensed distributor;

(D) The cigars or cigarettes are in the possession of a transporter who is in compliance with Code Section 48-11-22; or

(E) The cigars or cigarettes are in the possession of a registered taxpayer as defined in Code Section 48-11-14 and the time for making the report required by Code Section 48-11-14 has not expired.

(3) This subsection shall not be construed to require the commissioner to confiscate unstamped or nontax-paid cigars and cigarettes or other property when he has reason to believe that the owner of the cigars, cigarettes, or property is not willfully or intentionally evading the tax imposed by this chapter.

(b) Any cigars, cigarettes, or other property seized pursuant to this chapter may be offered for sale by the commissioner, at his discretion, at public auction to the highest bidder after advertisement as provided in this Code section. The commissioner shall deliver to the Office of Treasury and Fiscal Services the proceeds of any sale made under this Code section. Before delivering any cigars or cigarettes sold to a purchaser at the sale, the commissioner shall require the purchaser to affix to the packages the amount of stamps required by this chapter or to comply with the commissioner's alternate method. The seizure and sale of any cigars, cigarettes, or property pursuant to this chapter shall not relieve any person from a fine, imprisonment, or other penalty for violation of this chapter.

(c) When any cigars, cigarettes, or other property have been seized pursuant to this chapter, the commissioner, at his discretion, may advertise them for sale in a newspaper published or having a circulation in the place in which the seizure occurred, at least five days before the sale. Any person claiming an interest in the cigars, cigarettes, or other property may make written application to the commissioner for a hearing. The application shall state the person's interest in the cigars, cigarettes, or other property and his reasons why the cigars, cigarettes, or other property should not be forfeited. Further proceedings on the application for hearing shall be taken as provided in subsection (a) of Code Section 48-11-18. No sale of any cigars, cigarettes, or property seized pursuant to this chapter shall be made while an application for a hearing is pending before the commissioner. The pendency of an appeal under subsection (b) of Code Section 48-11-18 shall not prevent the sale unless the appellant posts a satisfactory bond with surety in an amount double the estimated value of the cigars, cigarettes, or other property and conditioned upon the successful termination of the appeal.

(d) Any vending machine containing or dispensing any cigarettes which do not bear the tax stamps required under this chapter or containing or dispensing any cigars upon which the tax has not been paid either through the purchase of stamps or the alternate procedure provided by the commissioner as required under this chapter shall be a contraband article. The commissioner may seize any such machine and deal with it in the same manner as provided by law for the seizure and sale of unstamped cigarettes and nontax-paid cigars.