EXCLUSIVE | PIL In Supreme Court Seeking Stricter GST Checks, Expert Ved Jain Warns Of Systemic Loopholes Enabling Fraud With Stolen Aadhaar And PAN

A Public Interest Litigation (PIL) has been filed in the Supreme Court demanding stricter checks in the GST registration process to combat fraud using stolen Aadhaar and PAN details.

The petition has been filed by Supreme Court advocate Rudra Vikram Singh, highlighting how identity theft is being used to register fake firms and issue fraudulent GST invoices, causing massive losses to the national exchequer.

Singh, who claims to be a victim, revealed that his PAN card and digital signature were misused to register a bogus company name in Ballari, Karnataka.

The fake firm was granted a GST number through the auto-approval system, without any document verification by officials. It later issued fake invoices worth over Rs.37 lakh.

The petition cites government and parliamentary data to show the alarming scale of GST fraud:
As per the petition: Rs.1,200 crore fraud detected in 2018, Rs.11,000 crore in scams by 2020, Rs.20,000 crore worth of frauds in just three months of 2021. In 2023, the government admitted to 21,791 fake registrations and over Rs.24,000 crore in tax evasion.

Additional scams were uncovered in 2024 and 2025 across multiple states, the plea alleges.
The petition seeks mandatory Aadhaar-based e-KYC for GST registration and enhanced data protection for Aadhaar and PAN.

The plea argues for the creation of an independent monitoring body and the transfer of serious cases to the CBI or other independent agencies for investigation.

Ved Jain, a tax law expert, told iTV Network that GST frauds often begin with stolen PAN and Aadhaar details submitted to various regulators and agencies during routine verifications.

He explained that earlier GST registration was simple, by submitting PAN and Aadhaar online, a person could obtain registration and issue purchase and sale invoices.

Fraudsters exploit this gap by registering fake firms using stolen credentials and then generating large transactions, leaving the real PAN or Aadhaar holders to face unexpected notices and litigation.

Jain said victims are frequently harassed after large, suspicious transactions appear: enforcement agencies trace the invoices back to the legitimate PAN or Aadhaar owner, who then must prove they never conducted those transactions.

Meanwhile, the GST department suffers revenue loss and often fails to trace the masterminds. Jain said that perpetrators are typically well versed in the system’s loopholes and have exploited them for a long time.

He said, though recent requirements for physical verification have started to limit some abuses.
To tackle the problem, Jain urged coordinated action between GST authorities, police, and investigative agencies to determine how registrations were obtained and whether there was collusion.

As a preventive measure, Jain said that early use of analytics and AI to flag abnormal transactions and prompt immediate intervention will prevent this.

He also stressed the need for an inclusive, sustained probe that identifies and prosecutes the real culprits.

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