Delhi HC Orders Biometric Aadhaar Authentication for Every GST Registration Amid Misuse of Stolen PAN, Aadhaar:

The Delhi High Court has directed tax authorities across the country to ensure that no new GST registration is allowed without biometric-based Aadhaar authentication. The court passed the interim order on September 8, citing the growing misuse of stolen or frozen PAN and Aadhaar details to create fake GST registrations.

A division bench of Justice Anil Khetarpal and Justice Shail Jain noted that biometric Aadhaar authentication is currently being carried out only in cases that are flagged as “risky” by the GST system based on various parameters and data analytics.

The court observed that the tax authorities had not pointed out any major difficulty in making biometric Aadhaar authentication compulsory for every GST registration. It therefore directed the authorities to implement the requirement across the country with immediate effect.

The tax authorities, however, have been allowed to inform the court if they face any practical problems in implementing the order.

The court also pointed out a gap between the government's statement in Parliament and the actual implementation of the system. According to documents placed before the court, the Minister of State for Finance had earlier told the Rajya Sabha that biometric Aadhaar authentication had already been made mandatory for GST registration. However, officials told the court that it was being used only for applications identified as risky.

The issue has become serious because of the large number of fraudulent GST registrations detected using stolen or frozen PAN and Aadhaar details. Government data showed that 2,800 such fraudulent registrations were detected in 2023-24, involving suspected tax evasion of around Rs 15,085 crore.

In 2024-25, another 1,654 fraudulent GST registrations were detected, involving tax evasion of about Rs 13,109 crore. Together, the two years accounted for 4,454 fraudulent registrations and nearly Rs 28,194 crore in detected tax evasion.

The High Court said the situation was causing both revenue losses to the government and harassment to innocent people whose identity documents were misused. The court urged the authorities to treat the issue seriously and take stronger steps to prevent fraudulent registrations.

The court has also asked the authorities to examine 10 suggestions submitted by senior advocate Tarun Gulati to strengthen the GST registration process. These include facial recognition, video verification of PAN and Aadhaar, keeping records of IP addresses and device locations, physical verification of business premises, real-time alerts to PAN holders and additional checks for first-time GST registrations or PAN-Aadhaar mismatches.

The matter will come up for further hearing before the Delhi High Court on September 22, 2026.