JEST GST - 451

SEPTEMBER 09, 2026

Dial 112 for GST Fraud

By Vijay Kumar

A couple of days ago, Delhi Police posted on X:

Do you suspect a GST fraud? Call 112!

But what exactly is the Delhi Police emergency operator supposed to do about GST fraudulent Input Tax Credit?

And why this sudden, dramatic police crusade into the esoteric realm of indirect taxation?

That's quite a story.

From Jet Lag to GST Lag

If you thought the greatest peril of leaving Indian shores was jet lag or missing home cooked food, spare a thought for the NRI in the United States who woke up to discover that, without his knowledge or consent, he had turned into an enterprising interstate tycoon.

Vikram Kaushal who claims to be in the United States of America filed a writ petition in the Delhi High Court alleging that his PAN and Aadhaar had been hijacked to spawn GST registrations in Odisha and Tamil Nadu. Before he could fathom his overnight transition into a baron running "KK Enterprises" and "Kaushal Enterprises," the tax administration moved with ruthless efficiency: adjudicated ex-parte liabilities and slapped a freeze on his bank account.

Desperate, he approached the Delhi High Court dragging not merely the GST officers who handed out registrations like candy, but the Income Tax Department itself-pleading for a mandamus to cancel his compromised PAN, issue him a fresh one, and break the Aadhaar PAN unholy matrimony.

His prayers were as revealing as they were desperate:

1. Cancel his compromised PAN and issue a new PAN;

2. Delink his Aadhaar from his hijacked PAN;

3. Cancel the fraudulent GSTINs retrospectively or declare them void ab initio;

4. Quash all tax liabilities fastened upon him under these bogus registrations;

5. Remove the restrictions placed on his bank account.

His complaint before the SHO, Defence Colony on 28.10.2025 and the authorities concerned in this regard, as usual, went unattended.

The PAN Time Bomb

This saga captures the terrifying peril of the Permanent Account Number in the GST era. PAN, once a harmless tax identity, has become the master key to ghost empires. Once your PAN leaks, you cease to be a salaried employee, an NRI, or a quiet pensioner; you become an unwitting dealer floating crores of rupees in fake invoices. When the carousel collapses, the kingpins vanish with bags of cash, leaving the genuine PAN holder to face summonses, attachment orders, and frozen bank accounts.

The Court's Alarm Bells

On 07 May 2026, the Delhi High Court issued notice.

But right behind Vikram stood another petitioner, Neha, with the same nightmare: her PAN and Aadhaar hijacked to float shell firms and generate massive tax demands.

The Court noted on 21 August, 2026:

1. This is the second case where the Petitioner alleges fraudulent GST registration by some other person by using the PAN Card and Aadhaar Card numbers of the Petitioner.

2. If the allegations of the Petitioner are to be accepted, there are rampant fraudulent GST Registration(s) in the name of innocent persons and pursuant to which huge liability is created.

3. Keeping the gravity of the situation in view, Mr. Tarun Gulati, learned Sr. Counsel, who normally represents assessees before this court is requested to assist the Court. He has assured to file a note suggesting ways and means to curb such practices.

Notice was issued to the Commissioner of Delhi Police and the matter was listed on 01.09.2026. - 2026-TIOL-1046-HC-DEL-GST

On 01.09.2026, both the cases were heard together. Senior Counsel Tarun Gulati had placed on record certain suggestions, apart from the instructions issued by the authorities from time to time, for curbing the misuse of PAN Card and Aadhaar Card particulars of innocent persons for obtaining fraudulent GST registrations.

The suggestions placed before the Court:

1. During the registration process, facial recognition of the applicant with the Aadhaar database should be made mandatory.

2. A video-based verification of the PAN and Aadhaar should be made mandatory by requiring the applicant to upload a 20-30 second video in which he/she shows his/her face along with the original PAN card and Aadhaar card before the camera. Further, the applicant should be required to read aloud a system-generated prompt containing his/her name or other relevant details, along with a unique code generated by the common portal similar to the process followed for DSC registration by e-Mudhra.

3. The IP address and device location used at the time of filing the application should be preserved by the GST common portal as well as the jurisdictional authority granting GST registration, so that such data will be readily available for reference in the event a dispute subsequently arises as to the identity of the person who filed the application.

4. Mandatory physical verification of the proposed principal place of business should be undertaken by the GST Department prior to the grant of registration.

5. Real time sharing of data with Income Tax Department which shall also in real time send a message and email to the PAN holder that his/her PAN has been used for GST registration. A system should be developed to validate data and cross check it with the Form 26AS/Form 168 generated for the taxpayer.

6. For a sudden and significant increase in turnover, the system should flag the registration under the potentially suspected category.

7. Real-time cross check with the Aadhaar holder confirming that the applicant has actual knowledge of the business/ PPOB being registered under his Aadhaar.

8. Sending of message to Digilocker [if available] informing that the PAN/Aadhaar number has been used for GST registration and obtaining consent-confirmation.

9. Directorate General of Analytics and Risk Management (DGARM) can create a specific PAN-Aadhaar-mismatch and "first time use of PAN/Aadhaar for GST" risk parameter.

10. While applying for a GSTIN, the applicant may be required to nominate one or more identifiable persons such as business associates, employees, partners, or family members who can corroborate the applicant's identity and the existence of the proposed business.

The Court observed,

It is not disputed by learned counsel appearing for the Respondents that the problem of obtaining fraudulent GST registrations by using the PAN Card and Aadhaar Card numbers of innocent citizens has been rampant since the enforcement of the CGST Act, 2017. Nearly nine years have elapsed; however, the Respondents have failed to curb these malpractices, which not only affect citizens who have nothing to do with such GST registrations, but also result in huge loss to the Government.

The Police Comedy

The Delhi Police Commissioner, on September 1, deputed a Sub-Inspector who knew nothing about GST to assist the Court. The Court noted that it is a matter of concern that the officer was not aware of the problem or the issue.

The Bench was not amused. Handing down a stern ultimatum, the Court granted a "last opportunity" to the Commissioner of CGST, the Commissioner of Delhi State GST, and the Commissioner of Delhi Police to coordinate and place an effective institutional remedy on record -failing which appropriate and effective orders would follow.

The Poster Parade

Faced with judicial wrath, the Police administration shifted into PR overdrive. Within days, the Economic Offences Wing flooded social media with slick graphics featuring handcuffs, gavels, and magnifying glasses, announcing: "GST FRAUD? THINK TWICE. Dial 112 if you suspect any GST fraud."

Pity the emergency operator at 112, trained to dispatch PCR vans to street fights and traffic accidents, fielding an emergency distress call:

Inspector saab, help! An unscrupulous dealer in Mayapuri has passed on ineligible Input Tax Credit in direct violation of Section 16(2)(c) without depositing tax to the government using my inward GSTR-2B!

Whether dialling 112 catches a single fake invoice kingpin remains to be seen. But you can always point to the glossy poster and proclaim: "My Lords, the police are in action mode!"

The Institutional Chaos

Turning GST enforcement over to the police is a cure far worse than the disease. GST is a specialized, statute-bound commercial law administered by dedicated trained revenue officers equipped with search, seizure, and adjudicatory powers. Encouraging local police stations to jump into technical GST disputes will only produce parallel harassment and extortion.

The police should enter strictly upon formal requisition by tax authorities to investigate organized identity theft and forgery - not as roadside auditors of tax invoices.

GST must fix its own gaping systemic loopholes, build robust safeguards, and stand on its own feet instead of relying on emergency police helplines and poster drives.

- In GST, your PAN works harder than you do.

- Aadhaar is the new lottery ticket-anyone can win a firm in your name.

- And Delhi Police? You can't fight fraud with posters and puzzled sub inspectors.