Supreme Court sets aside ₹425 crore penalty over fake legal citations, says material appears to be ‘hallucination of AI’

A diamond trader facing a ₹425.27 crore customs penalty has received major relief from the Supreme Court after the court found that the customs adjudicating authority had relied on non-existent judgments, fake citations and legal propositions that did not appear in the cases cited.

The Supreme Court, in its September 2 judgment in Vijay Ghanshyam Gadiya v. Union of India & Anr., did not examine whether the underlying customs allegations against Gadiya were correct.