Vijay Ghanshyam Gadiya Vs Union of India & Anr. (Supreme Court of India)
Summary: The Supreme Court considered a challenge to a customs penalty of Rs. 425,27,99,100/- imposed on Vijay Ghanshyam Gadiya by the Additional Commissioner of Customs, Surat under Section 114 of the Customs Act, 1962. The penalty arose from an allegation that a consignment of natural diamonds had been mis-declared as lab-grown diamonds to pay a lower tariff.
The Order-in-Original dated 08.10.2025 was challenged before the Gujarat High Court, but the challenge failed when the High Court dismissed the appeal on 20.01.2026. The matter then reached the Supreme Court.
The Supreme Court did not enter into the merits of the underlying customs dispute. Instead, the appellant contended that several judgments and articles relied upon by the second respondent in the Order-in-Original had been generated using Artificial Intelligence.
The Court independently verified the material relied upon in the customs order and found that the second respondent had relied upon case laws that were either non-existent or had fake citations. The Court further found that some case laws which did exist did not lay down the legal propositions attributed to them. The Court observed that the material appeared to be a hallucination of AI.
