Case Details: Marhabba Overseas Pvt. Ltd. vs. Union of India (2026) 40 Centax 16 (Guj.)
Judiciary and Counsel Details
- A.S. Supehia & Pranav Trivedi, JJ.
- S/Shri S N Soparkar, Sr. Adv., Parth H Bhatt, Ms Khyati A Chugh & Sudeep Biswas, for the Petitioner.
- S/Shri Ankit Shah & Pradip D Bhate, for the Respondent.
Facts of the Case
A show cause notice was issued under Section 75 of the CGST Act and the Gujarat GST Act and adjudication proceedings were undertaken by the jurisdictional Commissioner against the petitioner-assessee. During the course of hearing before the Court, the petitioner-assessee pointed out a concerning trend in the impugned order whereby the Commissioner had rejected four core defence submissions by placing reliance on certain judicial precedents. The impugned order cited case laws such as Coastal Container, NKAS Services, Flock India, W. N. Chadha and Rajasthan State Chemical Works in support of the conclusions recorded by the authority. It was contended that some of the cited judgments were non-existent while others, though in existence, were not even remotely connected to the issues raised in the defence statement. On this basis, the petitioner-assessee challenged the validity of the reasoning adopted in the impugned order and questioned the reliance placed on such citations. The matter was accordingly placed before the Gujarat High Court.
High Court Held
The Gujarat High Court held that the reasoning and findings recorded by the Commissioner while dealing with the defence submissions were flawed and deceptive since they were based on incorrect or unrelated judicial citations. The Court observed that it appeared that the Commissioner had relied upon citations generated through Artificial Intelligence without reading or verifying the actual judgments. It was held that quasi-judicial authorities cannot blindly rely upon AI-generated case law or citations without examining whether such judgments exist and whether they are relevant to the issues involved in the proceedings. The Court further observed that appropriate guidelines were required to be prescribed for quasi-judicial authorities to avoid blind reliance on Artificial Intelligence-generated citations which either do not exist or are unrelated to the dispute. Accordingly, the matter was stayed and directed to be listed for further consideration.
