Case Details: Marhabba Overseas (P.) Ltd. vs. Union of India - [2026] 183 taxmann.com 743 (Gujarat)
Judiciary and Counsel Details
- A.S. Supehia & Pranav Trivedi, JJ.
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S N Soparkar, Sr. Adv., Parth H Bhatt, Ms Khyati A Chugh & Sudeep Biswas for the Petitioner.
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Ankit Shah & Pradip D Bhate for the Respondent.
Facts of the Case
The petitioner challenged the show cause notice (SCN) and the impugned order issued by the Commissioner. During the hearing, the petitioner submitted that the Commissioner had rejected four core defences cited, which were either non-existent or unrelated to the issues raised in the defence statement. It was contended that the reasoning and findings recorded by the Commissioner were flawed and deceptive, as they appeared to be based on AI-generated citations without reading the actual judgments. It sought that guidelines be prescribed for quasi-judicial authorities to prevent reliance on non-existent or irrelevant AI-generated judgements. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the reliance placed by the Commissioner on the aforementioned judgements was incorrect, as the cited authorities were either non-existent. It was observed that the findings recorded by the Commissioner under Section 75 of the CGST Act, and the Gujarat GST Act, were flawed due to unverified reliance on AI-generated case law. It was held that quasi-judicial authorities must ensure that the judgements and citations they refer to are factually accurate, directly applicable, and verified before incorporation in orders. The Court directed that appropriate guidelines be prescribed to prevent reliance on AI-generated or irrelevant judgement.
List of Cases Referred to
- Union of India v. Coastal Container Transporters Association [2019] 104 taxmann.com 364/73 GST 211 (SC) (para 2)
- NKAS Service (P) Ltd v. Union of India [2021-VIL 37-MAD] (para 3)
- NKAS Services (P.) Ltd. v. State of Jharkhand [2022] 136 taxmann.com 138/91 GST 736/58 GSTL 257 (Jharkhand) (para 3)
- CCE v. Flock (India) (P.) Ltd 2000 taxmann.com 701/120 ELT 285 (SC) (para 4)
- Union of India v. W.N. Chadha [1993 Supp (4) SCC 260] (para 5)
- CCE v. Rajasthan State Chemical Works 1991 taxmann.com 24/55 ELT 444 (SC) (para 5).
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