Just watched a lecture from Swami Sarvapriyananda on Mandukya upanishad in which he states that Shankaracharya even cuts down the Law of Karma saying that ultimately that also is not true.
In what scripture did he say this?
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Although I see some comments referencing prarabhda karma, I see nothing in your question about this. That is answered in Brahma Sutras 3.3.27 and the Mundaka Upanishad II.ii.8. To answer your question, the law of karma is ultimately not true. The key word is ultimately. From an ultimate standpoint, there is no karma as there is only the one Absolute Existence. Karma exists within the world of causality (the sensual universe), it does not exist beyond. Gaudapada in his Karika, commentary (Chapter 4) on the Mandukya Upanishad says (Swami Nikhilananda translator):
A substance may be the cause of another substance, and a non-substance, the cause of a another non-substance. But the jivas [atman] cannot possible be anything like a substance or a non-substance.
Thus external appearances (objects) are not caused by the mind, nor is the mind caused by them. Hence thoughtful people hold on to the principle of absolute non-creation.
As long as a person clings to the belief of causality, he will find cause producing effect. But when this attachment to causality wears away, cause and effect become non-existent.
and Sankara's commentary on this verse:
As long as a man cherishes faith in causality and say to himself: 'I am the doer. I have done these righteous or unrighteous deeds and I shall reap their results in a future birth'--in other words, as long as he falsely attributes causality to Atman and clings to this belief--he will see cause producing effect. Such a man will be subject to incessant birth and death as a result of his attachment to the belief in causality. But when his clinging to this belief, which is the result of ignorance, is destroyed by the Knowledge of the non-dual Atman--just as possession by a ghost is destroyed by means of incantations, medicinal herbs, etc.--then causality will cease to operate.
- As long as a person clings to the belief in causality, samsara will continue to expand for him. But when this attachment to causality wears away, samsara becomes non-existent.
The law of cause and effect is the law of karma. As verse 59 says, the imaginary sprout is born from the imaginary seed. Brahman alone is real. All else is within the realm of maya and is neither real or unreal. As the Asthvakra Samhita says, A man who says he he free, becomes free, a man who says he is bound, remains bound...