Gujarat HC flags AI-generated case law in GST order

Ahmedabad: A week after the Supreme Court cautioned lawyers about relying on artificial intelligence (AI) to draft petitions, the Gujarat high court has flagged what it described as a "worrying trend" — quasi-judicial orders allegedly relying on AI-generated and questionable case law. In a case involving Marhaba Overseas Pvt Ltd, the court found that several judgments cited in a GST order could not be verified. Some were even attributed to the wrong courts.The issue before the Supreme Court had also centred on non-existent judgments being cited as precedents in AI-assisted petitions. A similar instance has prompted the HC to consider "prescribing some parameters" for quasi-judicial authorities when citing judicial precedents in their orders.
The case arose from proceedings against Marhaba Overseas Pvt Ltd. The company received a notice dated June 29, 2025, issued on the GST portal by the additional commissioner of Central Goods and Services Tax and Central Excise. After the company filed its defence, the commissioner passed an order against it on Sep 26, 2025.Challenging this order, the company moved the HC through senior advocate Saurabh Soparkar and advocate Parth Bhatt. They pointed out that several judgments cited in the additional commissioner's order could not be traced despite searches. Some rulings were shown as having been delivered by the Gujarat high court, but were in fact judgments of the Supreme Court or other courts.The lawyers urged the HC that "some guidelines are required to be prescribed to the quasi-judicial authorities in referring to the judgments blindly generated through AI, which are not in existence and, even if they are in existence, they do not remotely apply to the issues raised by the assessee".On hearing this, the bench of Justice A S Supehia and Justice Pranav Trivedi said that the submission "merits acceptance". The court termed this "a worrying trend". It said, "The reasonings/findings recorded by the respondent commissioner, while dealing with the defence submissions, by placing reliance on the aforementioned judgment/citations, are flawed and deceptive. It appears that the commissioner, without reading the actual judgments, followed the AI-generated citations and case law."The HC further said, "We find that this is an appropriate case, wherein some directions are called for regulating/prescribing some parameters for quasi-judicial authorities while placing reliance on the judgments either of the high courts or of the Supreme Court of India, while dealing with legal issues raised by an assessee."The HC posted a further hearing on March 13, when GST's counsel was asked to address the court on this issue.