New Delhi [India], September 10 : The Delhi High Court has directed all authorities across the country not to allow any GST registration without biometric-based Aadhaar authentication henceforth, citing the continuing misuse of stolen or frozen PAN and Aadhaar details to create fraudulent GST registrations.
A Division Bench of Justice Anil Khetarpal and Justice Shail Jain said the authorities must take the issue with “all seriousness” as the practice was causing loss of government revenue and harassment of innocent citizens. 
The Court also granted liberty to the authorities to place objections regarding any practical difficulty in implementing the direction.
The Court further directed the authorities to examine a set of suggestions placed before it by Senior Advocate Tarun Gulati for curbing the misuse of PAN and Aadhaar particulars for obtaining fraudulent GST 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 Delhi Police 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 also recorded that the respondents’ counsel could not point out any difficulty in mandating biometric Aadhaar authentication for GST registration. 
It therefore issued the nationwide direction as an immediate measure, while permitting the authorities to raise any practical difficulties before the Court.
Among the suggestions placed before the Court are mandatory facial recognition of applicants with the Aadhaar database, video-based verification of PAN and Aadhaar, preservation of IP address and device-location details used during registration, physical verification of the proposed principal place of business, real-time data sharing with the Income Tax Department and alerts to PAN holders when their details are used for GST registration.
Other suggestions include flagging sudden and significant increases in turnover, real-time confirmation from the Aadhaar holder regarding the business being registered, alerts through DigiLocker, creation of PAN-Aadhaar mismatch and first-time-use risk parameters, and requiring applicants to nominate identifiable persons who can corroborate their identity and the existence of the proposed business.
The Court has listed the matter for further consideration on September 22, 2026, in the supplementary list.