According to what you wrote, it's wired wrong:
VLS --> 5V on Arduino (with 100 nF capacitor in btwn)
VS --> 12V battery thru fuse box (also with 100 nF capacitor)
The capacitors should connect from the two voltages to Ground, not actually connect Arduino 5V to VSS, for example.http://www.circuitstoday.com/wp-content/uploads/2011/01/h-bridge-motor-control-circuit-using-L298.png
