Tax Officer Cites Non-Existent Judgements Generated By AI, Gujarat HC Quashes Order
Summarized by AI; it may make mistakes. Check important info
Summarized by AI; it may make mistakes. Check important info
The Gujarat High Court has quashed an adjudication order passed by a state tax officer after discovering that the authority relied entirely on fake, non-existent legal precedents generated by artificial intelligence.
A division bench issued a stern warning to the Gujarat State Tax Department, ruling that any future reliance on unverified AI content by tax authorities would directly attract contempt of court proceedings. Notably, this is the second time the department has cited a non-existent judgment.
Fake Citations in Official Orders
The breach came to light when an enterprise challenged a show-cause notice and subsequent cancellation orders issued by the State Tax Officer in Surat. During proceedings, the petitioner's advocate demonstrated that the tax officer had cited judgements that simply did not exist in legal records, along with wrong citations and irrelevant legal ratios.
Summoned by the court, the probationary tax officer appeared in person and submitted an unconditional apology through an affidavit. The officer admitted to using AI tools for legal drafting due to a lack of administrative experience, adding that he has since completed a specialized training programme on handling AI in official duties.
Mandatory Human Oversight for Tax Authorities
Following the High Court's sharp reprimand, the Office of the Additional Commissioner of State Tax issued statewide administrative instructions governing AI usage across all commercial tax offices in Gujarat.
The new directive orders officers to independently verify every legal citation, rule, and statutory provision against primary official records before issuing orders. The guidelines clarify that while AI tools can assist administrative workflow, they can never replace independent human application of mind or statutory judicial reasoning.
Setting aside the impugned cancellation order, appellate decisions, and the original show-cause notice against the petitioner enterprise, the High Court granted the tax department liberty to initiate fresh proceedings strictly in accordance with law.
