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Court Warns Tax Depts on AI-Generated Notices
29 Nov
Summary
- Delhi High Court cautioned tax departments against AI use.
- AI citations risk 'hallucinations' like fake judgments.
- AI cannot replace human judgment in legal processes.
The Delhi High Court has recently cautioned both the Income Tax and GST departments about the potential pitfalls of using Artificial Intelligence (AI) in the issuance of show cause notices. The court's division bench stressed the absolute necessity for these departments to exercise extreme caution when citing judicial precedents, particularly if generated or assisted by AI.
The bench's concerns stem from the observed inaccuracies and the potential for 'AI hallucinations,' which can lead to the citation of fake or non-existent judgments. In a specific ruling, the court noted that AI tools like ChatGPT cannot be the sole basis for adjudicating legal or factual matters due to the possibility of generating incorrect or fictional data.
While acknowledging AI's potential for preliminary research or understanding, the court firmly stated that at this technological stage, AI cannot replace human intelligence or the humane element in the adjudicatory process. Therefore, all judgments cited in official notices must be thoroughly verified to prevent the use of fabricated legal precedents.
