The Delhi High Court has ordered authorities nationwide to ensure that no GST registration is granted without biometric Aadhaar authentication, pointing to the continued use of stolen or frozen PAN and Aadhaar details to obtain fraudulent GST registrations.
A Division Bench comprising Justice Anil Khetarpal and Justice Shail Jain stressed that the authorities should address the matter with “all seriousness”, noting that such fraudulent registrations were resulting in revenue losses for the government while also causing difficulties and harassment for innocent individuals.
At the same time, the court allowed authorities to raise concerns about any practical challenges they may face while implementing the directive.
The bench also asked the authorities to consider recommendations submitted by Senior Advocate Tarun Gulati aimed at preventing the misuse of details for securing fraudulent registrations.
The directions were passed in petitions including one filed by Neha, who alleged fraudulent GST registration by another person using her PAN and Aadhaar details.
The Court had earlier noted that it was the second such case before it and had expressed concern over the possibility of “rampant” fraudulent GST registrations in the names of innocent persons, followed by creation of huge tax liabilities.
The Bench had earlier given the Commissioner, CGST, Commissioner, DGST and Commissioner of a last opportunity to find an effective solution to the problem, warning that failing this, it would have no choice but to pass “appropriate and effective orders”.
During the proceedings, the Court was informed that biometric Aadhaar authentication was being carried out only when the system identified an application as “risky” based on parameters and data analytics.
The Bench also took note of figures disclosed by the Minister of State in the Ministry of Finance in the Rajya Sabha. According to the disclosure, 2,800 fraudulent GST registrations involving stolen or frozen PAN/Aadhaar details were detected in 2023-24, involving ₹15,085 crore in detected tax evasion. In 2024-25, 1,654 fraudulent registrations were detected, involving ₹13,109 crore in tax evasion.
The Court observed that despite the statement that biometric Aadhaar-based authentication had been made mandatory for GST registration, it appeared that the measure had not been fully implemented even after more than a year, resulting in continued fake registrations using stolen or frozen PAN/Aadhaar details.
The Bench noted that counsel appearing for the respondents was unable to identify any obstacle to making biometric Aadhaar authentication compulsory for GST registration.
In view of this, the Court ordered the measure to be implemented across the country, while allowing the authorities to bring any operational or practical challenges to its notice.
The proposals submitted to the Court include making facial recognition against the Aadhaar database compulsory, conducting video verification of PAN and Aadhaar details, and retaining IP addresses and device-location information used during the registration process. They also call for physical verification of the proposed principal place of business, real-time information sharing with the Income Tax Department and notifications to PAN holders whenever their details are used to seek GST registration.
Additional recommendations include monitoring abrupt or substantial jumps in reported turnover, obtaining real-time confirmation from Aadhaar holders about the business being registered, sending alerts through DigiLocker, developing risk indicators for PAN-Aadhaar mismatches and first-time use of such details, and requiring applicants to identify persons who can verify their identity and confirm the existence of the proposed business.
The matter will next come up before the Court on September 22, 2026, in the supplementary list.
