GST has created more problems than solving: Delhi HC in plea against fake GST registrations

The Delhi High Court on Tuesday pulled up the Central and Delhi Goods and Services Tax (GST) authorities and the Delhi Police over a petition concerning rampant fraudulent GST registrations using PAN card and Aadhaar card details to swindle money from unassuming citizens [Neha v. Union of India & Ors].

A Bench of Justices Anil Kshetarpal and Shail Jain stated that the GST department and the Delhi Police have not disputed that fraudulent GST registrations are rampant since CGST Act, 2017 was enforced.

“A period of nearly nine years have elapsed, however, the respondents [Ministry of Finance, GST department and Delhi Police] have failed to curb these malpractices which not only affect the citizens of the country who have nothing to do with GST registration, but also results in huge loss to the government,” the Court stated.

The Court today granted a last opportunity to the concerned authorities to find an effective solution to the problem. Otherwise, the Court added, it will be constrained 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,” Justice Kshetarpal stated.

On the last date of hearing on August 21, Senior Advocate Tarun Gulati was asked to assist the court by filing a note suggesting ways to curb such fraudulent practices. Notice was also issued to the Commissioner of Delhi Police.

In today’s hearing, the Court was informed by the government counsel that action has been taken by making large number of arrests and issuing challans against wrongdoers.

”It is not as if the department has not taken any action,” the counsel stated.

To this submission, Justice Khetarpal stated,

“I will stop GST registration if this continues. GST has created more problems than solving.”

Justice Kshetarpal further questioned the standing counsel why such fraud does not happen with bureaucrats and their families.

“Why not minister so that once minister is put in problem, things move. Why not the wife of cabinet secretary?”

The Court has summoned the Commissioner CGST, Commissioner Delhi GST and Commissioner of Delhi Police on the next date of hearing on September 8.

The petitioner, Neha, stated that two GST registrations were fraudulently obtained using her PAN and Aadhaar without knowledge or consent to swindle over ₹4.46 crore from her savings bank with Punjab National Bank. Upon inquiry, the Bank disclosed that it had received a purported GST notice for the said amount in favour of a GST authority.

Neha lodged complaints in March 2026 before the concerned GST authorities. However, she claimed that no authority has taken any action or responded to her complaints. She stated that she is a housewife and has no connection with the alleged business transactions in any manner.

She thus moved the High Court seeking directions to the Union Ministry of Finance, the Central Board of Indirect Taxes and Custom, the Department of Commercial Taxes, the Commissioner of Central Goods and Services Tax and the Delhi Police to investigate into the matter.

“The said notice is fraudulent and part of a larger conspiracy involving identity theft and misuse of her financial credentials,” Neha stated in the petition.

Advocates Manoj Mittal, Ankit Singh, Vaibhav Bhardwaj, Nikhil Pramod and Satya Shruti appeared for Neha.