The Delhi High Court has expressed serious concern over cases of fraudulent GST registrations obtained by misusing the PAN and Aadhaar details of unsuspecting citizens, giving the Centre and Delhi Police a final opportunity to devise an effective mechanism to prevent such fraud.The court observed that if the allegations made in the petitions are correct, fraudulent GST registrations are being obtained on a large scale in the names of innocent people, exposing them to substantial tax liabilities and causing revenue losses to the government.

Woman Alleges PAN-Aadhaar Misuse

A Bench of Justice Anil Khetarpal and Justice Shail Jain passed the order while hearing two petitions. One of the petitions was filed by a woman named Neha, who alleged that another person had used her PAN and Aadhaar details to obtain a fraudulent GST registration in her name.

The court noted that this was the second such case before it. The Bench observed that, if the allegations were found to be correct, they indicated that fraudulent GST registrations were being carried out extensively using the identities of innocent citizens. Such registrations can leave individuals facing tax liabilities arising from businesses with which they have no connection.

Court Suggests Facial Recognition And Video Verification

During the hearing, senior advocate Tarun Gulati placed several technological and administrative measures before the court to prevent misuse of PAN and Aadhaar details. One of the key suggestions was mandatory facial recognition of every GST registration applicant against the Aadhaar database.

The proposals also included video-based verification. Under the suggested system, an applicant would have to upload a 20-to-30-second video showing their face and the original PAN and Aadhaar cards. The applicant would also be required to read out a system-generated prompt containing their details and a unique code. The measure is intended to reduce the possibility of third parties using stolen or misused identity documents to obtain GST registrations.

IP Tracking And Physical Verification Proposed

Another proposal was to record and preserve the IP address and device location used while submitting a GST application. The information would remain available with the GST portal and the concerned jurisdictional authority so that it could be examined later if the identity of the person who submitted the application is disputed.

To identify shell or fraudulent businesses, the suggestions included mandatory physical verification of the proposed principal place of business before granting GST registration. Alternatively, a risk-based system could be used to conduct random physical inspections of GST-registered businesses twice a year.

Real-Time Alerts And Additional Safeguards

The proposals further called for real-time data sharing between the GST and Income Tax departments. Under such a system, a PAN holder could receive an immediate alert whenever their PAN is used to obtain GST registration. The system could also flag sudden and significant increases in turnover for further scrutiny.

Other proposed safeguards include alerts through DigiLocker, specific risk parameters for PAN-Aadhaar mismatches and additional checks when a PAN or Aadhaar number is being used for GST registration for the first time. Applicants could also be required to provide details of identifiable persons who can corroborate their identity and confirm the existence of the proposed business.

Centre And Police Given Final Chance

The Bench recorded that the respondents had not disputed that fraudulent GST registrations using the PAN and Aadhaar details of innocent citizens had become a serious problem since the implementation of the Central Goods and Services Tax Act, 2017. The court observed that nearly nine years had passed, yet authorities had failed to effectively curb the malpractice.

The court also expressed concern that an officer deputed by Delhi Police to assist it was unaware of the issue despite its seriousness. The Bench has now given the CGST Commissioner, DGST Commissioner and Delhi Police Commissioner a final opportunity to find an effective solution.

The court warned that if the authorities failed to take effective measures, it would have no option but to pass appropriate and effective orders. The matter has been listed for further hearing on September 8.

What Happens Next?

The Delhi High Court’s intervention puts the spotlight on the need for stronger safeguards against identity misuse in GST registrations. With the Centre and Delhi Police given a final opportunity to address the issue, the next hearing on September 8 is expected to indicate what measures authorities propose to prevent fraudulent registrations and protect innocent PAN-Aadhaar holders from wrongful tax liabilities.

The Enforcement Directorate (ED) on Thursday conducted searches at 11 premises in Kolkata linked to Kohinoor Power as part of a money laundering investigation into an alleged ₹290 crore bank loan fraud. The searches were carried out under the Prevention of Money Laundering Act (PMLA) and covered premises linked to the company’s promoters, Prashant Bothra and Vijay Bothra, as well as other directors and auditors.

The agency has alleged that loans obtained from banks to establish a 66 MW power plant in Jharkhand were diverted to other group entities and for personal use instead of being used for the intended project.

How Was the ₹290 Crore Loan Allegedly Diverted?

According to the ED, Kohinoor Power had secured bank financing for setting up the power project in Jharkhand. The funds were meant to be used for establishing the plant and meeting expenses related to the project.

However, the agency has alleged that a portion of the loan amount was transferred to other group companies, while some of the funds were allegedly used for personal purposes.

The ED is now examining the flow of the loan proceeds, including the bank accounts into which the funds were transferred, the companies involved in the transactions and the stated purpose of these financial movements.

Investigators are also trying to determine whether borrowed funds were moved to entities that had no direct connection with the proposed power project.

Why Was Only Around ₹7 Crore Recovered?

Kohinoor Power subsequently faced financial difficulties and entered insolvency proceedings before the National Company Law Tribunal.

Liquidation proceedings were later initiated with the aim of recovering dues from the company’s available assets and resources.

However, according to officials, only around ₹7 crore could be recovered during liquidation, significantly lower than the outstanding bank exposure.

The ED is now examining how the company’s financial position deteriorated, what assets were available before insolvency proceedings began and how much of the borrowed money was allegedly diverted away from the power project.

What Is the ED Looking for in the Kolkata Searches?

Thursday’s searches form part of the agency’s investigation into the alleged diversion of loan proceeds and their subsequent laundering.

Officials are examining financial records, bank documents, business records and other material connected with the transactions. The evidence is expected to help investigators reconstruct the movement of funds and identify financial links between various group entities.

The ED has also searched premises linked to the company’s directors and auditors. Investigators are examining whether other individuals associated with Kohinoor Power played any role in the alleged financial irregularities.

Are Promoters, Directors and Auditors Also Under Scrutiny?

The searches covered premises linked to promoters Prashant Bothra and Vijay Bothra, along with other directors and auditors associated with the company.

Investigators are examining transactions through which the loan proceeds were allegedly transferred to other entities and whether those movements had any legitimate connection with the power project.

The role of individuals involved in the company’s financial management, accounting and movement of funds is also expected to be examined as part of the broader money laundering investigation.

What Happens Next in the ₹290 Crore Loan Probe?

The investigation is now focused on determining how much of the ₹290 crore borrowed from banks was actually used for the 66 MW power project, how much was transferred to other group entities and how much was allegedly used for personal purposes.

The agency is also examining why only around ₹7 crore could eventually be recovered during liquidation despite the much larger loan exposure.

The ED will analyse documents and other evidence gathered during the searches before deciding on further action. If investigators establish evidence of deliberate diversion of loan proceeds and attempts to disguise such transactions as legitimate financial dealings, further proceedings under the PMLA could follow against the individuals and entities concerned.

For now, the probe remains centred on the alleged misuse of the ₹290 crore bank loan, the movement of funds between different entities and the circumstances that resulted in only a fraction of the outstanding amount being recovered during liquidation.

Police in Madhya Pradesh’s Indore have busted a cyber fraud network allegedly operating through the buying and selling of SIM cards. The investigation revealed that one SIM card was passed from its registered holder to several other people for money before eventually being used in cyber fraud. Police have arrested Rajesh Chaudhary, 42, in connection with the case and are searching for Bhagwandas alias Nana, Himanshu Junwal and Ashish Sharma.

How Did 151 SIM Cards Get Linked to 212 Fraud Complaints?

The case came to light during verification of suspicious data received from the Indian Cyber Crime Coordination Centre. Police found that 151 suspicious SIM cards linked to 49 point-of-sale holders and SIM-selling agents in the Indore urban area had been used in 212 financial fraud complaints registered across different states and cities.

Following the finding, investigators began examining the suspected numbers, their registered holders and the people involved in issuing and transferring the SIM cards.

During the investigation, one suspicious SIM was traced to Rohit Dalve, 27, a resident of Swarnbag Colony. During questioning, Dalve told investigators that he had issued the SIM on March 15, 2026, after completing the required document verification.

The SIM was issued in the name of Rajesh Chaudhary, 42, of Indore. Police subsequently questioned Chaudhary, leading investigators to uncover the chain through which the SIM allegedly changed hands.

How Did One SIM Pass Through Multiple Hands?

According to police, Chaudhary had obtained the SIM using his Aadhaar card but later handed it over to Bhagwandas alias Nana for ₹200.

Bhagwandas allegedly passed the SIM to Himanshu Junwal for financial gain and received around ₹500 in return. Investigators found that Junwal subsequently handed the same SIM to Ashish Sharma, who allegedly used the number for cyber fraud.

The investigation therefore revealed a chain in which the SIM moved from its registered holder to several individuals in exchange for money before reaching the alleged fraudster.

Such repeated transfers can make it difficult for investigators to immediately establish the identity of the person actually operating a SIM during a cybercrime.

How Were Victims Allegedly Trapped With Clothing and Franchise Offers?

Investigators found that the suspicious number was allegedly used to contact people with offers of jeans and pants at wholesale prices.

The accused allegedly collected money from customers but failed to supply the promised goods. In another method, victims were allegedly offered franchises for wholesale clothing businesses and asked to make payments.

The case was also linked to a complaint filed by Anil Kumar Gupta, a resident of Kheri district in Uttar Pradesh. According to the complaint, the accused allegedly offered him a franchise for a wholesale jeans and pants business.

They allegedly demanded ₹30,000 for the franchise and collected ₹10,000 from him as part of the deal. However, neither the promised franchise nor the goods were provided. Gupta subsequently filed a complaint on the National Cyber Crime Reporting Portal on May 27, 2026.

Who Has Been Arrested and Who Is Still Being Searched For?

Based on the complaint and findings from the investigation, MIG police registered a case and initiated further action.

Rajesh Chaudhary has been arrested, while Bhagwandas alias Nana, Himanshu Junwal and Ashish Sharma remain absconding.

Police are now examining the roles allegedly played by each person in obtaining, transferring and ultimately using the SIM card.

Is There a Bigger SIM Network Behind the Cyber Frauds?

Investigators are examining whether the 151 suspicious SIM cards linked to 212 financial fraud complaints were operated by a single organised network or were being used by multiple cybercrime groups.

Police are also looking into the wider network involved in the transfer and misuse of SIM cards, including the role of point-of-sale holders and SIM-selling agents linked to the suspicious numbers.

The case highlights the risks associated with SIM cards being obtained in one person’s name and subsequently handed over to others for money. Users should never sell, rent or hand over SIM cards registered in their name, as misuse of the number in cybercrime can bring the registered subscriber under investigation while making it harder for police to identify the actual fraudster.