Delhi HC Directs Nationwide Biometric Aadhaar Authentication For GST Registration

September 10, 2026

New Delhi: The Delhi High Court has directed authorities across the country to not allow any GST registration without biometric-based Aadhaar authentication, citing the continued 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 issue must be dealt with “all seriousness”, noting that fraudulent registrations were causing government revenue losses and harassment to innocent citizens.

The Court, however, granted authorities liberty to bring any practical difficulties in implementing the direction to its notice.

Court Seeks Stronger Measures Against Fake GST Registrations

The directions were passed in petitions including one filed by Neha, who alleged that another person had fraudulently obtained GST registration using her PAN and Aadhaar details.

The Court had earlier noted that it was the second such case before it and expressed concern over the possibility of “rampant” fraudulent GST registrations being created in the names of innocent people, potentially resulting in huge tax liabilities.

The Bench had previously given the Commissioner, CGST, Commissioner, DGST and Commissioner of Delhi Police a final opportunity to find an effective solution, warning that otherwise it would have to pass “appropriate and effective orders”.

₹15,085 Crore Tax Evasion Detected In 2023-24

During the proceedings, the Court was informed that biometric Aadhaar authentication was currently being carried out only when the system classified 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:

2023-24: 2,800 fraudulent GST registrations involving stolen or frozen PAN/Aadhaar details were detected, involving ₹15,085 crore in detected tax evasion.
2024-25: 1,654 fraudulent registrations were detected, involving ₹13,109 crore in tax evasion.

The Court observed that despite biometric Aadhaar-based authentication being stated to be mandatory for GST registration, the measure appeared not to have been fully implemented even after more than a year.

The Bench also recorded that the respondents’ counsel could not point out any difficulty in mandating biometric Aadhaar authentication for GST registration.

Court Considers Facial Recognition, Business Verification

The Court directed authorities to examine suggestions placed before it by Senior Advocate Tarun Gulati to prevent misuse of PAN and Aadhaar details.

Among the proposed measures 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
Alerts to PAN holders when their details are used for GST registration
Flagging sudden and significant increases in turnover
Real-time confirmation from Aadhaar holders about the business being registered
Alerts through DigiLocker
PAN-Aadhaar mismatch and first-time-use risk parameters
Requiring applicants to nominate identifiable persons who can corroborate their identity and the existence of the proposed business

The Court issued the nationwide biometric authentication direction as an immediate measure while allowing authorities to raise any practical difficulties before it.

The matter has been listed for further consideration on September 22, 2026, in the supplementary list.