GST Order Built on AI-Invented Case Law Quashed: Gujarat High Court

A tax officer admitted using artificial intelligence to draft a GST cancellation order and cited judgments that do not exist. The Gujarat High Court quashed the whole chain of orders and told officers to verify every citation against primary sources.

The Gujarat High Court has set aside a GST registration cancellation, the rejection of the revocation application and the appellate order that followed it, after finding that the tax officer had relied on case law that does not exist. The officer accepted that he had used an artificial intelligence tool to draft the order and to find the judgments cited in it. On verification, the authorities relied on were non-existent, misquoted, or had nothing to do with the point being decided.

The Court held that AI may assist an officer's reasoning but cannot replace his own application of the law to the facts. It quashed the show cause notice and every order built on it, directed that a fresh notice be issued, and required the officer to consider the assessee's defence and pass a reasoned order. Departing from those directions, the Court warned, would amount to contempt.

What this means for you

If an order or notice against you cites a judgment, look it up before you reply. A citation that cannot be traced is now a real ground of challenge, and the point is not confined to Gujarat or to registration matters. The scheme already requires the officer to apply his mind to your reply: CBIC's own flyer sets out the FORM GST REG-17 notice, the REG-18 reply and the REG-19 order, at https://gstcouncil.gov.in/sites/default/files/e-version-gst-flyers/51_GST_Flyer_Chapter2.pdf

Topics:GST case lawAI generated judgmentsregistration cancellationshow cause noticereasoned orderGujarat High CourtcontemptGST appealChennai GSTTamil Nadu

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