Delhi HC acts big on fake GST registrations, rules no GST registration without biometric-based Aadhaar authentication

The Delhi High Court in an interim judgement has ruled that no GST registration is to be allowed without biometric-based Aadhaar authentication.

Delhi High Court said: “Hence, for the time being, directions are issued to all the authorities across the country not to allow any GST Registration without biometric based AADHAR authentication henceforth.”

This judgement by Justice Anil Kshetarpal and Justice Ms Shail Jain came against the background of two cases filed by Smt Neha and Mr Kaushal before the Delhi High Court, where some anti-social elements obtained GST registrations in Neha and Kaushal’s names using their PAN/Aadhaar details and conducted certain transactions which created GST tax liabilities in their name (since the GST registration is in their name).


Whereas in reality, Neha and Kaushal claimed that they had no idea about this GST registration and consequent GST tax liability arising out of the said registration.

The government’s counsel told the Delhi High Court that biometric-based Aadhaar authentication for GST registration is carried out only if the system identifies the case as ‘risky’ on the basis of various parameters and data analytics.

However, the Minister of State in the Ministry Of Finance, while answering the question on fraudulent GST Registration has disclosed in the Rajya Sabha that in the year 2023-2024, there were 2800 fraudulent GST Registrations obtained by using stolen or frozen PAN/ AADHAR details involving detection of Rs 15,085 crore of tax evasion.

Also read: GST officers detect Rs 15,851 cr fraudulent ITC claims in April-June, total 3,558 fake firms uncovered

In the year 2024-2025, the number of fraudulent GST Registrations were 1654 and tax evasion of Rs 13109 rores was detected. It was disclosed by the government counsel that biometric AADHAR based authentication has been made mandatory for the GST Registration.

Moreover, Delhi High Court observed 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 registrations obtained using stolen or frozen PAN/ AADHAR details.

Thus, the Delhi High Court said that they are compelled to request the competent authorities to rise to the situation, which is resulting in the loss of revenue to the government and harassment of innocents. The authorities are expected to take up the matter with all seriousness.

The Delhi High Court in this interim judgement (CNR No. DLHC010392522026) said that the authorities are also expected to examine the suggestions given by Tarun Gulati, Senior Counsel.

This case is listed for further consideration on September 22, 2026 in the supplementary list.

Chartered Accountant Ankit Joshi, Partner, Indirect taxation, N.A.Shah Associate LLP, said to ET Wealth Online: "The Hon'ble Delhi High Court's interim order making biometric Aadhaar authentication mandatory for every GST registration is a welcome move. At present, biometric authentication is required only where the system flags an application as risky. The Hon'ble Court has now extended it to all applicants."

According to Joshi, universal Aadhaar biometric verification will make it much harder to misuse the PAN and Aadhaar, protecting both revenue and honest taxpayers. However, the authorities should, keep multi-state businesses in mind.

Joshi says: "Many such businesses have a single authorised signatory. Requiring that person to visit a GST Suvidha Kendra in every state, and to re-verify each time an application is rejected for a minor mismatch, would be a challenging task. Authorities need to come up solutions for such hardships."

According to Joshi, since this is an Delhi High Court interim order, and the authorities still have liberty to file objections on practical difficulties. However, the Hon'ble Delhi High Court has also asked the authorities to examine the other suggestions placed before it including options like video-based verification with the original PAN and Aadhaar, alerts to the PAN holder through DigiLocker, SMS and email whenever the PAN is used for a GST registration etc.

Joshi says: "If these measures are adopted alongside biometric authentication, they can create a robust registration system."

Also read: Rs 8,000 cr GST scam shocker: 246 fake companies, 13 states and a mastermind— How did they pull it off?

(In the previous judgement date August 21, 2026, the court had asked Delhi Police about this fake GST registration issue. The police showed seriousness about this issue but the person appointed by police back then had told the court that he was not aware of the problem or the issue involved in these cases yet.)

What are the suggestions given by senior counsel Tarun Gulati regarding GST registration

As per the earlier Delhi High Court order dated August 21, 2026, the following suggestions were given by senior counsel Tarun Gulati:

• During the registration process, facial recognition of the applicant with the Aadhaar database should be made mandatory for all registrations
• A video-based verification of the PAN and Aadhaar should be made mandatory by requiring the applicant to upload a 20-30 seconds video in which he/she shows his/her face along with the original PAN card and Aadhaar card before the camera. holding cach document for a minimum of 5 seconds. Further, the applicant should the required to read aloud a system generated prompt containing his her name or other relevant details, along with a unique code generated by the common portal similar to the process followed for DSC registration by eMudhra.
• The IP address and device location used at the time of filing the application should he recented and preserved by the GST cooumon portal as well as the jurisdictional authority sanctioning the application and granting GST registration, so that such data will be readily available for reference in the event a dispute subsequently arises as to the identity of the person who filed the application.
• Mandatory physical verification of the proposed principal place of business should se undertakut by the GST Department prior to the grant of registration, rather than sich verification being confined to cases flagged as high-risk by the existing riskunalytics engine. Or, in the alternative, random physical inspections of the principal place of business of randomly selected GST registrations should be undertaken by the GST Department on a bi-annual basis, based on a risk evaluation system.
• Real time sharing of data with Income Tax Department which shall also in real sime send a message and email to the PAN holder that his/her PAN has been used for GST registration. A system should be developed to validate data and cross check it with the l'orm 26AS/Form 168 generated for the taxpayer
• For a sudden and significant increase in turnover, the system should flag the registration under the potentially suspected category
• Real-time cross check with the Aadhaar holder confirming that the applicant has actual knowledge of the business/ PPOB being registered under his Aadhaar.
• Sending of message to Digilocker [if available] informing that the PAN/Aadhaar number has been used for GST registration and obtaining consentconfirmation.
• Directorate General of Analytics and Risk Management (i.e., DGARM) can create a specific PAN-Aadhaarmismatch and "first time use of PAN/Aadhaar for GST" risk parameter
• While applying for a GSTIN, the applicant may be required to nominate one or more identifiable persons such as business associates, employees, partners, or family members who can corroborate the applicant's identity and the existence of the proposed business.