Delhi HC bars GST registration without biometric-based Aadhaar authentication

The Delhi High Court has mandated that all authorities across the country must not grant any goods and services tax (GST) registration without biometric Aadhaar-based authentication. The court's interim order, delivered by Justices Anil Kshetarpal and Shail Jain, stated that for the time being, all authorities are directed not to permit any GST registration without such authentication.

The government is free to inform the court of any practical difficulties it may face in implementing this measure. The court emphasized the urgency of addressing the issue due to its detrimental impact on government revenue and the harassment of innocent taxpayers.

The order was issued in response to several petitions alleging fraudulent GST registrations using stolen or frozen Permanent Account Number (PAN) card and Aadhaar card numbers. These fraudulent registrations cost the government ₹13,109 crore in tax evasion during the 2024-25 financial year and ₹15,085 crore during FY24. Senior lawyer Tarun Gulati suggested adding facial recognition to the authentication process, requiring applicants to upload a 20-30 second video showing their face along with their original PAN and Aadhaar cards.

The court also noted that despite more than a year having passed since GST authorities announced that biometric Aadhaar-based authentication would be mandatory, the implementation has not been fully carried out, leading to continued fake GST registrations. A petition filed by Neha alleged that two GST registrations were fraudulently obtained using her PAN and Aadhaar, without her knowledge or consent, to defraud over ₹4.46 crore from her savings bank account with Punjab National Bank.