Courts Cannot Decide Cases on Judgments That Do Not Exist

AI tools generate text by prediction, not by verification. Asked for authority, they can produce a citation that reads perfectly and exists nowhere.

This is usually called hallucination. For most writing it is an inconvenience. In legal work it is closer to a defect in the foundation: a submission built on an invented case is not merely wrong, it is unverifiable, and the error may only surface after the court has relied on it.

In a civil appeal decided on 2 September 2026, the Supreme Court examined a customs penalty of ₹425.27 crore imposed on a diamond trader by the Additional Commissioner of Customs, Surat, under Section 114 of the Customs Act, 1962. The adjudication order — and the Gujarat High Court order upholding it — relied on judicial precedents that did not exist, and which appeared to have been generated or hallucinated by artificial intelligence.

• The entire penalty order was set aside.
• A decision of a public authority must rest on real law and real judgments.
• Both the Gujarat High Court order and the original adjudication order were quashed, so the matter must be decided afresh.

A judgment is a form of authority. When a party cites one, the court is entitled to treat it as existing, and the opposing party must either distinguish it or explain why it does not apply. An invented citation exploits that assumption of good faith, and it is difficult to detect because nothing on the page looks unusual.

The consequence is systemic rather than individual: if fabricated authority can be relied on without consequence, the value of citation itself declines.

• Treat any AI-generated citation as unverified until it is found in a primary source.
• Verify against an official reporter or a primary database, not a secondary summary.
• Check the paragraph cited actually supports the proposition, not merely the case name.
• Keep a verification record for citations in written submissions.
• Never let a tool supply authority that you have not personally read.

Technology is a drafting aid. The professional obligation to verify remains with the person who signs the pleading, and it does not transfer to the software. A citation check is now as ordinary a step as proofreading — and, given what can follow from an invented case, more important.