In rapid growing technology world, electronics has taken over a leap in every domain, storing the copious data into small chip. A smart card, chip card, or integrated circuit card (IC) is any pocket-sized card with embedded integrated circuits. Smart Cards are secure portable storage devices used for numerous applications especially security related to user confidential information involving access to system’s database either online or offline. Smart cards are manufacture using plastic, generally polyvinyl chloride (PVC). This research is chiefly to study the security principles of smart card and assess the security aspect effects on smart card technology usage and adoption. The proposed Smart License system for E-government is very useful for the purpose of denying the access of driving the vehicle without having Valid license. The project comprises microcontroller-based system having 89S52 controller, Smart Card, GSM Module and respective Sensors. The system does verification of the License expiry of the driver with the help of RTC Details. In case of license Expiry of the user system will send message to the RTO office number saved in the system. Along with License verification the system is also useful for LPG leakage detection in the car. The LPG Leakage detection helps user in order to avoid further accidental conditions and step towards to diminish excessive pollutant release by the particular car.