New Delhi, Sept. 5 -- A diamond trader facing a Rs.425.27 crore customs penalty has received major relief from the Supreme Court after the court found that the customs adjudicating authority had relied on non-existent judgments, fake citations and legal propositions that did not appear in the cases cited.

The Supreme Court, in its September 2 judgment in Vijay Ghanshyam Gadiya v. Union of India & Anr., did not examine whether the underlying customs allegations against Gadiya were correct. Instead, a bench of Justices Dipankar Datta and Sheel Nagu focused on the integrity of the adjudication process and found that the use of dubious legal material was enough to make the penalty order unsustainable.

The court therefore set aside both the ...