TaxTMI 
TaxTMI 
The danger in sole dependence on artificial intelligence without verifying the facts !.
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....he danger in sole dependence on artificial intelligence without verifying the facts !.<br>By: - K Balasubramanian<br>Goods and Services Tax - GST<br>Dated:- 1-9-2026<br>I happened to come across one recent high court order dated 20/08/2026 of Gujarat High Court which is analysed in this write up. One State tax officer who was a probationary officer and not conversant with handling case laws, in th....
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....e matter of "Faiz Enterprise Through Proprietor Mahetar Mahir Farukbhai Versus State Tax Officer, Unit-67, Surat & Anr. - 2026 (8) TMI 1389 - GUJARAT HIGH COURT" quoted three citations of TMI which were incorrect on the subject matter. This fact was brought to the notice of the High Court by the counsel of the petitioner and the court passed interim order on 13/08/2026 and posted the final he....
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....aring on 20/08/2026. The subsequent developments are highly interesting. The entire team of the unit 67 including Assistant Commissioner and Deputy Commissioner were present in the final hearing with the state tax officer as well. The additional commissioner of state taxes, with the approval of chief commissioner of state taxes has issued detailed instructions on use of artificial intelligence ....
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....on 18/08/2026. On the same day, the state tax officer also attended a training programme on AI. Based on the unconditional apology of the state tax officer, the case came to a close as the department itself came forward to set aside both SCN as well as OIO and agreed to initiate fresh proceedings. I personally see the setting up of several benches of the GSTAT all over India as a threat to all ....
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....officers who pass orders violating the principles of natural justice, passing orders in gross violations of the provisions of law etc. The interference of the high court has seen fantastic results as the department has worked on war footing during 14/08/2026 to 19/08/2026 to convince the high court which ordered on 13/08/2026 as "3. Learned AGP shall take appropriate instructions in the matter, fa....
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....iling which the Court will be constrained to seek presence of the State Tax Officer Unit-67 namely, Mr. D.A.Yadav who has passed the impugned order. This Court shall also initiate appropriate action against him, in case it finds that the submissions advanced by learned advocate Mr.Vora regarding the case laws upon which reliance has been placed by the State Tax Officer are correct, that such case ....
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....laws are either not in existence or do not even remotely apply to the issue. Such instructions shall be taken by the next date of hearing". The State tax officials have voluntarily come forward to withdraw the order which is a rare phenomenon. The instructions dated 18/08/2026 requires wide publicity all over India, though issued by the Gujarat State Government. The crux of the instructions rea....
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....d as "iv. Wherever Artificial Intelligence (AI), open-source tools or other technological tools are utilized to enhance the efficiency and effectiveness in adjudication proceedings, such use must be accompanied by appropriate human oversight, as AI tools are not always reliable due to concerns regarding their accuracy, transparency, and the unknown nature of underlying information. v. Orders must ....
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....reflect independent legal reasoning and record the officer's own application of mind to the law and the facts of the case. AI output may assist in reasoning but cannot substitute it". The Gujarat High Court has ordered that "9. Under the circumstances, in light of the aforenoted facts, we quash and set aside the show cause notice dated 30/10/2025, the impugned order of cancellation dated 15....
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..../12/2025, order rejecting revocation application dated 10/03/2026 (issued on 23/03/2026) passed by the respondent no.1 and appellate order dated 25/05/2026 along with the GST APL-04 dated 26/05/2026 issued by the respondent no.2; and the respondent authority shall issue fresh notice to the present petitioner. The petitioner shall fully co-operate with the proceedings. We also clarify that the repl....
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....y/defense taken by the petitioner shall be duly considered by the respondent authority while passing the order, and a reasoned order, in accordance with law shall be passed". The high court also instructed We direct that the instructions dated 18/08/2026, which we have incorporated in our order shall be scrupulously followed, and any violation of the instructions would amount to contempt of this C....
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....ourt, in view of the directions issued by us". Conclusion: There is nothing wrong in dependence of the technology to the required extent. However, mere dependence on artificial intelligence generated information without verification of the facts is dangerous as happened in this case. The counsel for the petitioner deserves appreciation for bringing the field formations behaviour in the most app....
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....ropriate manner to the notice of the high court through Faiz Enterprise Through Proprietor Mahetar Mahir Farukbhai Versus State Tax Officer, Unit-67, Surat & Anr. - 2026 (8) TMI 1389 - GUJARAT HIGH COURT. It is a lesson to all including tax professionals that before citing a case law reference in a higher forum like Tribunal or High Court, due care must be exercised to ensure that the referen....
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....ce is perfect in terms of citation as well as relevance. Let us use AI only to the required extent without depending on the same to full extent. =============<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....