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State Tax Officer's AI-generated fake case laws draw contempt warning
In a landmark judgment that sets clear boundaries for the use of artificial intelligence in , the has quashed a series of tax orders after discovering that the adjudicating officer relied entirely on AI-generated, non-existent case laws. The Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati further warned that any deviation from newly issued administrative safeguards will be treated as .
The Case That Exposed an AI Shortcut
The petitioner, Faiz Enterprise, had challenged a dated , an order cancelling its GST registration on , a rejection of revocation on , and an of . During the initial hearing on , the petitioner’s advocate, , pointed out a startling fact: the , had cited case laws in his order that either did not exist or had no relevance to the issues before him.
The bench noted that one cited judgment— —was completely non-existent. Another, , had a different citation and a that did not apply. A third, , similarly had no applicatory value.
Court’s Initial Reaction: Summoning the Officer
Expressing serious concern, the court on August 13 observed: “It appears that the has been passed by the State Tax Officer by placing reliance exclusively on the AI generated case laws.” The bench warned that it would summon the officer and consider initiating action if the allegations were confirmed.
and Corrective Measures
When the matter resumed on August 20, the State Tax Officer, Mr. Devang Arvindkumar Yadav, appeared in person and tendered an tendering an . He admitted that, as a probationary officer with limited experience, he had used Artificial Intelligence to draft the order, resulting in the citation of non-existent and irrelevant judgments. He also informed the court that he had since attended a training program on the proper use of AI in drafting adjudication orders.
Simultaneously, the , issued comprehensive instructions on , prescribing strict procedures for the use of AI by adjudicating and quasi-judicial authorities. These instructions require that any case law identified through AI must be independently verified using primary official sources, that original paragraphs be reproduced verbatim, and that orders reflect the officer’s own . The instructions explicitly state that orders based on unverified AI content will amount to and may attract .
Court’s Final Warning: Contempt for Non-Compliance
The High Court incorporated these administrative instructions into its judgment and issued a stern directive: “We direct that the instructions dated 18/08/2026, which we have incorporated in our order shall be scrupulously followed, and any violation of the instructions would amount to contempt of this Court, in view of the directions issued by us.”
Disposition and Path Forward
Appreciating the fair stance taken by the respondents, the court quashed the , the cancellation order, the revocation rejection, and the . It directed the authorities to issue a fresh notice and pass a after considering the petitioner’s defense. The court left all rights and contentions of the parties open.
This judgment sends a clear signal that while technology can assist in legal drafting, it can never replace the adjudicator’s duty to independently verify facts and law. Failure to do so will not only result in the quashing of orders but may also expose the officer to contempt proceedings.
