Case Law Details
Marhabba Overseas Private Limited Vs Union of India & Ors. (Gujarat High Court)
In Marhabba Overseas Private Limited Vs Union of India & Ors. before the Gujarat High Court, the petitioner challenged an order dated 26.09.2025 passed by the Additional Commissioner, Central GST and Central Excise. During the hearing, learned Senior Advocate Mr. Soparkar highlighted serious concerns regarding the impugned order, particularly the reliance placed on non-existing or irrelevant judicial precedents while rejecting the petitioner’s defence submissions recorded in paragraphs 19.1 to 19.4 of the order.
Regarding paragraph 19.1, the defence related to a defective show-cause notice dated 29.06.2025 uploaded on the GST portal without supplying Relied Upon Documents (RUDs). The authority rejected this submission relying on Union of India Vs. Coastal Container Transporters Association, 2019 S.C.C. OnLine SC 1744. It was pointed out that the cited page number was incorrect and, more importantly, that the Supreme Court judgment concerned classification of service and maintainability of a writ petition against a show-cause notice, not the issue of non-supply of RUDs.
For paragraph 19.2, the defence concerned non-compliance with the mandatory issuance of DRC-01A under Rule 142A of the CGST Rules, 2017. The authority relied on a purported Madras High Court judgment in M/s. NKAS Service Pvt. Ltd. Vs. Union of India, (2021-VIL-37-MAD). It was submitted that no such Madras High Court judgment exists and that the relevant case was decided by the Jharkhand High Court in M/s. NKAS Service Pvt. Ltd. Vs. State of Jharkhand, 2021 S.C.C. OnLine Jharkhand 1266, which in fact held in favour of the petitioner and emphasized compliance with principles of natural justice.
In paragraph 19.3, the petitioner had objected to delayed re-initiation of investigation and issuance of a show-cause notice for the same cause of action. The authority relied on CC Vs. Flock India Pvt. Ltd., 2000 (120) ELT 285 (SC). It was argued that this judgment related to classification under the Central Excise Act, 1944 and refund issues, and had no relevance to the petitioner’s defence.
With respect to paragraph 19.4, concerning violation of principles of natural justice due to inadequate opportunity to respond, the authority relied on Union of India Vs. W.N. Chadha, 1993 Supp (4) S.C.C. 260 and also cited Rajasthan State Chemical Works Vs. Union of India, 1991 (55) ELT 444 (Guj). It was pointed out that no such Gujarat High Court judgment exists; the cited decision was in fact of the Supreme Court in Collector of Central Excise, Jaipur Vs. Rajasthan State Chemical Works, Deedwana, Rajasthan, 1991 (55) ELT 444, arising from a Tribunal decision and concerning the meaning of “manufacturing process” under the CGST Act, not natural justice.
It was urged that guidelines be prescribed for quasi-judicial authorities to prevent blind reliance on Artificial Intelligence-generated citations that are either non-existent or irrelevant. The High Court found the concern justified and observed that the Commissioner’s reasoning appeared flawed and deceptive, suggesting reliance on AI-generated citations without reading the actual judgments.
The Court considered it appropriate to issue directions prescribing parameters for quasi-judicial authorities when relying on judgments of High Courts or the Supreme Court while deciding legal issues. The matter was adjourned to 12.03.2026, with notice waived by the respondents. Interim relief was granted in terms of paragraph 17(c) until final disposal of the writ petition, and direct service was permitted.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. During the course of hearing, learned Senior Advocate Mr.Soparkar has pointed out very worrying trend adopted by the Additional Commissioner, Central GST and Central Excise, while passing the impugned order dated 26.09.2025, by placing reliance on the non-
existing judgements or though in existence, albeit not even remotely connected to the issues raised by the petitioner in his defence statement dated 22.09.2025. While referring to four core defence submissions more particularly, in paragraph Nos.19.1, 19.2, 19.3 and 19.4 referred to in the impugned order, he has invited attention of this Court to the citations, upon which the reliance is placed while dealing with such submissions made by the respondent-authority.
2. The defence submission recorded by the Officer in paragraph No.19.1 of the impugned order, relates to the issuance of defective and unreasonable show-cause notice dated 29.06.2025, which was uploaded on GST Portal without annexing or supplying the Relied Upon Documents (RUDs) to the assessee. The said defence submission has been rejected by the Officer by placing reliance on the judgement in the case of Union of India Vs. Coastal Container Transporters Association, 2019 S.C.C. OnLine SC 1744. Learned Senior Advocate has submitted that in fact, the said citation appears to be incorrect and instead page number is 274 instead of 1744. It is submitted that though there is some error in recording the page number, the judgement rendered by the Supreme Court does not even remotely connects to the issue relating to the non-supplying of the RUDs, but instead the same relates to the classification of the service and maintainability of the writ petition against the show-cause notice.
3. The second defence submission as recorded in paragraph No.19.2 raised by the petitioner relates to the mandatory requirement of issuance of DRC-01A as per Rule 142A of the Central Goods and Service Tax (CGST) Rules, 2017 which are not complied with and correspondingly it is submitted that the respondent has rejected the said contention by placing reliance on the judgement of the Madras High Court in the case of M/s. NKAS Service Pvt. Ltd. Vs. Union of India, (2021-VIL-37-MAD). In this regard, learned Senior Advocate has submitted that in fact, neither the citation exists nor their any judgement of Madras High Court, and as per research undertaken by his office, the said judgement is delivered by the Jharkhand High Court in the case of M/s. NKAS Service Pvt. Ltd. Vs. State of Jharkhand, 2021 S.C.C. OnLine Jharkhand 1266 and while inviting attention of this Court to the said judgement, it is submitted that in fact, the Jharkhand High Court has held in favour of the petitioner by holding that the issue under GST DRC-01A has to fulfill ingredients of proper show-cause notice and in absence of such ingredients, the same would amount to violation of principles of natural justice.
4. Learned Senior Advocate has further referred to the defence submission recorded in paragraph No.19.3 of the impugned order, which relates to delayed re-initiation of investigation and issuance of show-cause notice for the same cause of action. It is submitted that while dealing with the said submission, the respondent authority has placed reliance on the judgement of the Supreme Court in the case of CC Vs. Flock India Pvt. Ltd., 2000 (120) ELT 285 (SC). In this regard, learned Senior Advocate has submitted that this judgement has no relevance to the defence submission, which has been raised by the petitioner and it relates to the classification rules under Central Excise Act, 1944 and also relating to the issue of refund.
5. Finally, learned Senior Advocate has referred to the defence submission recorded in paragraph No.19.4 of the impugned order, which pertains to the gross violation of principles of natural justice since no adequate time and opportunity was provided to respond to the allegations contained in the show-cause notice against the petitioner. It is submitted that while dealing with such defence submission, though the respondent authority has precisely placed reliance on the judgement of the Supreme Court in the case of Union of India Vs. W.N.Chadha, 1993 Supp (4) S.C.C. 260, but has also simultaneously, reliance is placed on the judgement of the Gujarat High Court in the case of Rajasthan State Chemical Works Vs. Union of India, 1991 (55) ELT 444 (Guj), which is absolutely ill-conceived. It is submitted that in fact, no such judgement of the Gujarat High Court exists and as per the research done by him, the judgement is of the Supreme Court rendered in the case of Collector of Central Excise, Jaipur Vs. Rajasthan State Chemical Works, Deedwana, Rajasthan, 1991 (55) ELT 444. Thus, it is submitted that though the citation is correct, the same is of the Supreme Court and not of the Gujarat High Court and it emanates from the decision of Customs, Excise & Service Tax Appellant Tribunal, Delhi and not from the Gujarat High Court. It is submitted that the said decision also refers to the meaning of manufacturing process under the CGST Act and does not deal with the defence submissions raised by the petitioner relating to the violation of principles of natural justice.
6. Thus, it is urged by the learned Senior Advocate that some guidelines are required to be prescribed to the quasi-judicial authorities in referring to the judgements blindly generated through Artificial Intelligence, which are not in existence and even if they are in existence, they do not remotely apply to the issues raised by the assessee.
7. The foregoing submissions and the concern expressed by the learned senior advocate Mr. Soparkar merits acceptance. The
reasonings/findings recorded by the respondent-Commissioner, while dealing with the defence submissions, by placing reliance on the aforementioned judgement/citations, is flawed and deceptive. It appears that the Commissioner, without reading the actual judgements, has followed the AI generated citations and case law.
8. Hence, we find that this is an appropriate case, wherein some directions are called for regulating/prescribing some parameters for quasi-judicial authorities while placing reliance on the judgements either of the High Courts or of the Supreme Court of India, while dealing with legal issues raised by an assessee. We also call upon learned Senior Standing Counsel Mr.Ankit Shah to apprise this Court on this concern by the next date of hearing.
9. Notice returnable on 12.03.2026. Matter to be placed at the top of the board. Learned Senior Standing Counsel Mr.Shah waives service of notice for and on behalf of the respondent(s).
Interim relief is granted in terms of paragraph No.17(c) till the final disposal of the writ petition. Direct service is permitted.
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