Delhi High Court Exposes GST Registration Fraud, Orders Investigation into Fictitious Entities
Court directs complaints against petitioners for forgery; Lawyers urged to verify client identities in GST-related cases
In a significant judgment aimed at curbing the rising trend of GST registration fraud, the Delhi High Court has uncovered the fraudulent activities of fictitious entities registering for GST using stolen identities and forged documents. The Division Bench, comprising Justice Prathiba M. Singh and Justice Harish Vaidyanathan Shankar, delivered a stern warning to legal practitioners, urging them to verify the authenticity of client identities and documents before filing petitions.
The judgment arose from the case of M/s S K Overseas vs. Superintendent Range 20 Central GST Division, where the court was presented with evidence revealing the fraudulent nature of GST registration by the petitioner firm. The investigation into the matter unveiled that Mr. Suraj, purported to be the proprietor of the firm, was entirely unaware of its existence and had no connection to it. The signature on the firm's rent agreement, although similar to Mr. Suraj's, was forged, further confirming the fraudulent setup.
The court expressed concern over the increasing instances where lawyers, relying on references from accountants and consultants, have filed petitions without meeting their clients or verifying the authenticity of affidavits and documents. This trend has led to the registration of fictitious firms, causing significant issues in GST-related matters.
Highlighting the professional responsibility of lawyers, the court reminded counsels of their duty to ensure the authenticity of affidavits and documents filed in court. It urged them to exercise caution and conduct verification through GST portals to prevent the filing of forged and fabricated documents.
Taking decisive action, the court directed the Registrar General to lodge complaints against the petitioners for forgery and fabrication of documents under the relevant provisions of the Bharatiya Nyaya Sanhita, 2023 and Bharatiya Nagarik Suraksha Sanhita, 2023. This move aims to hold accountable those involved in fraudulent activities and deter future occurrences.
Additionally, Mr. Ashish Chaurasia, an accountant linked to the case, has been summoned to appear before the court in the next hearing. The court has ordered that the present judgment be communicated to him through WhatsApp and the local police station.
The judgment not only underscores the seriousness of GST registration fraud but also serves as a reminder of the ethical obligations of legal practitioners. As the court continues its vigilance against fraudulent practices, the legal community is expected to uphold the integrity of the judicial process.
Bottom Line:
GST Registration Fraud - Court observed the increasing trend of fictitious entities being registered for GST by impersonation or stolen identities, with fraudulent affidavits and documents submitted in court. Lawyers are cautioned to verify client identities and document authenticity before filing petitions.
Statutory provision(s): Bharatiya Nagarik Suraksha Sanhita, 2023 Section 215, Bharatiya Nyaya Sanhita, 2023 Sections 227, 228, 229, 233, 236, 237, 246, 336(1), 340(2)
