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The Delhi High Court has sought a response from the Centre and the Delhi Police regarding cases where fraudulent GST registrations were obtained through the misuse of PAN and Aadhaar details. The court has directed that a robust system be established to prevent such incidents.

If your PAN and Aadhaar details fall into the wrong hands, they can be misused not only for banking or other financial activities but also to obtain fraudulent GST registrations. This could lead to significant trouble for you; you might face tax liabilities linked to a business you never actually operated.

In one such serious case, the Delhi High Court has sought a response from the Central Government. The court emphasized the urgent need to create a strong mechanism to curb instances where fraudulent GST registrations are created using the PAN and Aadhaar of innocent individuals. The court has granted the concerned officials a final opportunity to find a solution to this problem. The next hearing for the matter is scheduled for September 8.

What is the case all about?

Two cases related to fraudulent GST registrations were being heard by the Delhi High Court. One of these was filed by a woman named Neha. She alleged that another individual had fraudulently obtained a GST registration in her name by using her PAN and Aadhaar details.

The court noted that this was the second such case brought before it. If the woman's allegation proves true, it suggests there could be many others in whose names fraudulent GST registrations have been obtained. Consequently, they could face massive tax liabilities for businesses they never conducted.

What suggestions were made to prevent fraudulent GST registration?

Senior Advocate Tarun Gulati, who is assisting the court in this matter, has proposed certain measures. One suggestion is to make face verification—via the Aadhaar database—mandatory for individuals applying for GST registration. This could be achieved by recording a 20-30 second video of the applicant to verify their identity. Additionally, records of the IP address and device location used during the GST application process can be preserved. The primary benefit of this is that, in the event of a fraudulent registration, it will be possible to trace where and from which device the application was submitted.