Delhi High Court Addresses GST Fraud Concerns
The Delhi High Court has expressed its dissatisfaction with the Central and Delhi GST authorities, alongside the Delhi Police, regarding a petition that highlights widespread fraudulent GST registrations. These fraudulent activities involve the misuse of PAN and Aadhaar card details to deceitfully siphon funds from unsuspecting individuals, as highlighted in the case Neha v. Union of India & Ors.
A bench comprising Justices Anil Kshetarpal and Shail Jain scrutinized the GST department and Delhi Police for their inability to contain the proliferation of fake GST registrations since the enactment of the Central Goods and Services Tax Act, 2017. The bench remarked, “A period of nearly nine years has elapsed, yet the respondents [Ministry of Finance, GST department, and Delhi Police] have been unsuccessful in curbing these fraudulent practices, which not only impact citizens with no involvement in GST registration but also result in substantial governmental revenue losses.”
The court provided a final opportunity for the relevant authorities to devise a solution to this problem, cautioning that failure to do so would compel the court to issue stringent orders. Justice Kshetarpal emphasized, “Last opportunity is granted to the respondents [namely Commissioner CGST, Commissioner DGST, and Commissioner Delhi Police] to find an effective solution to the problem, failing which the court will be left with no choice but to pass effective orders. I can only assure you that I will not spare anybody if the officials are found wanting in discharging their duty.”
Proposed Solutions to GST Fraud
Previously, during an August 21 hearing, Senior Advocate Tarun Gulati was instructed to assist the court by proposing measures to counter such fraudulent activities. Additionally, a notice was served to the Commissioner of Delhi Police. In the latest session, the government counsel reported that numerous arrests and legal actions have been undertaken against perpetrators.
However, Justice Kshetarpal responded to these claims by stating, “I will stop GST registration if this continues. GST has created more problems than solving.” Furthermore, he questioned why similar fraudulent incidents do not affect bureaucrats and their families, questioning, “Why not minister so that once minister is put in problem, things move. Why not the wife of cabinet secretary?”
Petitioner’s Ordeal: A Case of Identity Theft
The petitioner, Neha, revealed that two GST registrations were fraudulently acquired using her PAN and Aadhaar details, leading to a misappropriation of over ₹4.46 crore from her Punjab National Bank savings account. Upon investigation, the bank disclosed receiving a supposed GST notice for the stated sum, favoring a GST authority.
Neha lodged complaints with the relevant GST authorities in March 2026, but alleges no action or response was received. As a housewife with no ties to the alleged business dealings, she sought the court’s intervention to direct the Union Ministry of Finance, the Central Board of Indirect Taxes and Customs, the Department of Commercial Taxes, the Commissioner of Central Goods and Services Tax, and the Delhi Police to investigate the matter further. Her petition describes the notice as fraudulent and part of a broader conspiracy involving identity theft and misuse of her financial credentials.
Representing Neha in court were Advocates Manoj Mittal, Ankit Singh, Vaibhav Bhardwaj, Nikhil Pramod, and Satya Shruti. The next hearing is scheduled for September 8.
