The Supreme Court has quashed a ₹425.27 crore Customs penalty after finding the adjudicating officer relied on non-existent, fake-cited and AI-hallucinated case law — the third such ruling Finoscape has covered in 2026.
Supreme Court Quashes ₹425-Crore Customs Penalty Built on AI-Hallucinated Case Law Read Post »
The Gujarat High Court quashes a GST cancellation order after finding the tax officer relied exclusively on AI-generated, non-existent case laws — and directs strict human verification of AI-assisted legal research going forward, warning that non-compliance will amount to contempt.
Two rulings this week reshape how faceless assessment notices and TDS penalty proceedings should be handled: a mandatory 7-day SCN window, and a sharpened line between non-deduction and delayed deposit under Section 271C.