New Delhi, September 10, 2026 (Yes Punjab News)
The Delhi High Court has directed authorities across the country not to permit any GST registration without biometric-based Aadhaar authentication, expressing concern over the continuing misuse of stolen or frozen PAN and Aadhaar details to create fraudulent registrations.
A Bench of Justices Anil Khetarpal and Shail Jain issued the directions while hearing two petitions alleging that GST registrations had been fraudulently obtained using the identity details of innocent individuals.
The court observed that fraudulent GST registrations had been a “rampant” problem since the enforcement of the CGST Act, 2017, and noted that nearly nine years had passed without the malpractice being effectively curbed.
The Bench said such fraudulent registrations not only cause harassment to citizens who have no connection with the businesses concerned but also result in substantial revenue loss to the government.
During the hearing, the court was informed that biometric Aadhaar authentication was currently being undertaken only in cases classified as “risky” by the GST registration system based on specified parameters and data analytics.
The court referred to data presented by the Minister of State for Finance in the Rajya Sabha, according to which 2,800 fraudulent GST registrations involving stolen or frozen PAN and Aadhaar details were detected in 2023-24, with tax evasion of Rs. 15,085 crore. In 2024-25, another 1,654 fraudulent registrations were detected, involving tax evasion of Rs. 13,109 crore.
The Bench noted that although biometric Aadhaar-based authentication had been stated to be mandatory for GST registration, the measure had not been fully implemented even after more than a year.
The court said authorities needed to “rise to the situation” and observed that counsel representing them had failed to point out any practical difficulty in making biometric authentication mandatory.
“Since, for the time being, directions are issued to all the authorities across the country not to allow any GST Registration without biometric-based Aadhaar authentication henceforth,” the court ordered.
However, the authorities have been given liberty to place before the court any objections or practical difficulties in implementing the direction.
The Bench also asked authorities to examine a series of measures suggested by senior advocate Tarun Gulati, who has been assisting the court in finding ways to prevent fraudulent GST registrations.
The suggestions include mandatory facial recognition against the Aadhaar database, video-based verification requiring applicants to show their face along with the original PAN and Aadhaar cards, recording and preserving the IP address and device location used for GST applications, and mandatory physical verification of the proposed principal place of business.
Other proposals include real-time sharing of registration data with the Income Tax Department, sending instant messages and emails to PAN holders when their PAN is used for GST registration, cross-checking applications with tax records and generating alerts for sudden or significant increases in turnover.
The suggestions also call for real-time confirmation from Aadhaar holders about their knowledge of the business and its principal place of business, along with alerts through DigiLocker wherever available.
Gulati further suggested that the Directorate General of Analytics and Risk Management (DGARM) develop specific risk parameters for PAN-Aadhaar mismatches and the first-time use of PAN or Aadhaar details for GST registration.
On August 21, the Bench had observed that the matter before it was the second case in which a petitioner had alleged that another person fraudulently obtained GST registration using their PAN and Aadhaar details.
The court had then granted the authorities a “last opportunity” to find an effective solution, warning that it could otherwise be left with “no choice but to pass appropriate and effective orders”.
The matter has been listed for further consideration on September 22.
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