The Delhi High Court has issued a directive prohibiting authorities across India from granting Goods and Services Tax (GST) registrations without biometric-based Aadhaar authentication. This ruling comes in response to ongoing issues involving stolen or frozen Permanent Account Number (PAN) and Aadhaar details. The court highlighted that fraudulent registrations persist despite existing government safeguards, which not only expose innocent individuals to potential tax liabilities but also result in significant revenue losses for the government.
The court said the problem had been “rampant” since the Central Goods and Services Tax Act came into force in 2017. Nearly nine years later, it said, authorities had still not been able to stop the misuse.
The court referred to figures disclosed by the Minister of State for Finance in the Rajya Sabha. The data showed the scale of fraudulent registrations involving stolen or frozen PAN and Aadhaar details.
The bench said such registrations can leave innocent people facing demands and other action for businesses they never operated. The fraud also causes a “huge loss to the government”. “It appears that despite passage of more than one year, the statement given by the minister on the floor of the house has not been fully implemented, resulting in continuous fake GST Registration obtained using stolen or frozen PAN/AADHAR details,” the bench said. The court said authorities needed to “rise to the situation” because the problem was hurting both the public and government revenue.
