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    "headline": "Supreme Court Quashes ₹425 Crore Fine on Gujarat Diamond Trader Using AI",
    "dek": "India's Supreme Court set aside a ₹425 crore customs fine after an officer relied on non-existent AI-generated case laws.",
    "prose": "The penalty was levied against Vijay Ghanshyam Gadiya for misdeclaring a consignment of natural diamonds as lab-grown diamonds to pay a lower tariff under Section 114 of the Customs Act, 1962. [^1]\n\nThe Supreme Court of India set aside an order issued by the Additional Commissioner of Customs in Surat on October 8, 2025, which imposed a penalty of ₹425.27 crore. [^2]\n\nThe Supreme Court bench, comprising Justices Dipankar Datta and Sheel Nagu, found that the customs adjudicating authority relied on non-existent judgments, fake citations, and legal propositions that did not appear in the cited cases. [^3]\n\nA bench of justices Dipankar Datta and Sheel Nagu remanded the matter back to an officer of the same rank to be decided by a different individual. [^4]\n\nThe Additional Commissioner of Customs relied on AI-generated case laws that did not exist to support the penalty order. [^5]\n\nThe Supreme Court applied the principle from its July 2026 judgment in Pooja Ramesh Singh v. Jammu & Kashmir Bank Ltd., which mandates a zero-tolerance approach towards AI-generated legal material without verification. [^6]\n\nThe Supreme Court has not permanently wiped out the customs proceedings against Gadiya but set aside the original Order-in-Original and the Gujarat High Court order, requiring the case to be decided afresh by another officer of the same rank. [^7]",
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