The case arose from an order passed by the Additional Commissioner on October 8, 2025, imposing a penalty of ₹425.28 crore on Vijay Ghanshyam Gadiya under Section 114 of the Customs Act, 1962. The penalty was imposed for allegedly misdeclaring a consignment of natural diamonds as lab-grown diamonds to attract a lower tariff.
Gadiya challenged the penalty before the Gujarat High Court. However, the High Court dismissed his challenge on January 20, 2026, prompting him to approach the Supreme Court.
Before the apex court, Gadiya contended that several judgments and articles relied upon by the customs officer had been generated using AI.