The Gujarat High Court, in a significant development raising questions over the use of Artificial Intelligence in quasi-judicial proceedings, has issued notices to Central GST and Excise authorities over submissions that allegedly relied on "AI-generated citations and case laws."
Court Flags "Non-Existing" and Irrelevant Judgments
A division bench comprising Justice A. S. Supehia and Justice Pranav Trivedi was hearing a petition filed by M/s Marhabba Overseas Private Limited challenging an order passed by the Additional Commissioner of CGST dated September 26, 2025.
During the proceedings, senior advocate S. N. Soparkar, appearing for the petitioner, highlighted what the court described as a "very worrying trend." It was argued that the CGST authority had relied on judgments that either:
- Did not exist at all,
- Were incorrectly cited and attributed to other courts, or
- Though genuine, were completely unrelated to the issues raised in response to the show cause notice.
The petitioner's legal team pointed out at least three such rulings that were allegedly misquoted or wrongly relied upon while passing the adjudication order.
Court Observes Findings Were "Flawed and Deceptive"
Taking note of the submissions, the High Court observed that the findings recorded by the Additional Commissioner appeared to be "flawed and deceptive." The bench remarked that it seemed the officer had relied on AI-generated case laws without verifying the authenticity or relevance of the cited judgments.
The oral order dated February 20 noted that blindly relying on Artificial Intelligence-generated legal references, without reading or verifying the original judgments, undermines the integrity of quasi-judicial proceedings.
Need for Parameters for Quasi-Judicial Authorities
The court acknowledged the senior counsel's argument that clear guidelines or "parameters" must be prescribed for quasi-judicial authorities when relying on judgments of High Courts or the Supreme Court.
The bench observed that:
Some directions may be necessary to regulate or prescribe parameters for quasi-judicial authorities while placing reliance on judgments, especially when such references are generated through Artificial Intelligence tools.
The matter has been listed for further hearing on March 12, and the CGST department’s senior standing counsel has been directed to respond to the concerns raised.
Wider Implications for GST Adjudication and AI Use
This case could have far-reaching implications for the use of AI tools in tax administration and adjudication under GST laws. While AI can assist in research and drafting, the High Court's observations underline that judicial and quasi-judicial authorities must independently verify legal precedents before relying on them in official orders.
If guidelines are eventually framed, they may set an important precedent for how AI-assisted legal research is to be used by tax officers and other quasi-judicial bodies across India.
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