Rajasthan Identity Theft Case: Labourer's Fight Against Fraudulent Firm

Identity Theft Scam in Rajasthan: How One Labourer’s Details Fueled an ₹18 Crore GST Fraud

A disturbing case out of Rajasthan has thrown the spotlight on how easily identity theft can spiral into GST fraud of massive proportions. The victim? A daily wage labourer named Veerdharam from Balotra—who, without his knowledge, became the so-called “proprietor” of a Delhi-based firm that executed fake transactions worth over ₹18 crore and allegedly evaded ₹3 crore in GST.

How Veerdharam’s Identity Was Hijacked

Veerdharam found out something was wrong only when he sat down with his Chartered Accountant to file his income tax return. To his shock, the CA discovered that a company called “Virdha Traders” had been registered under his name in Delhi. His PAN, Aadhaar, and even his mobile number had been used to set up the firm, with GSTIN 07CKIPR5140J1ZV and an address listed in Sabzi Mandi Main Market, North West Delhi.

The fraud came to light after an OTP for Aadhaar authentication was sent to Veerdharam’s mobile on July 10. He hadn’t requested any verification, let alone given consent. By that time, the fake firm had already handled high-value transactions involving copper scrap, rods, and polythene—all on paper, without his knowledge or involvement.

How Authorities Responded

Once the fraud was confirmed, Veerdharam acted quickly. He filed a police complaint on July 24, triggering a preliminary investigation into the identity theft.

The case didn’t stop there. The State GST department escalated the matter to the Delhi GST authorities, requesting cancellation of the fraudulent registration under Section 29(c) of the CGST Act.

In parallel, a detailed complaint was filed with the Central Board of Indirect Taxes and Customs (CBIC), along with senior Delhi GST officers. Investigators are now focused on identifying how Veerdharam’s personal information—along with OTPs—was accessed and used, and more importantly, who profited from the bogus transactions conducted under his name.

Why This Case Matters

What happened to Veerdharam is more than just a personal misfortune—it reveals significant vulnerabilities in the GST registration process. Despite recent reforms, the system is still susceptible to:

Misuse of PAN and Aadhaar
Lack of strong real-time KYC checks
Over-reliance on digital document uploads without physical verification

Recognising the risk, the CBIC recently issued Instruction No. 02/2024-GST, directing both Central and State GST offices to ramp up cross-verification measures and weed out fake GST registrations across India.

The Human Cost

Had the scam gone unnoticed longer, Veerdharam could have faced tax demands, legal complications, or damage to his credit profile. Thankfully, his CA's vigilance and prompt reporting likely spared him from a drawn-out battle with the authorities.

FAQs: Safeguarding Against Identity Theft in GST

1. How can someone misuse Aadhaar and PAN to register a fake GST business? Fraudsters often obtain copies of ID documents from past job applications, online leaks, or careless KYC submissions. They may also manipulate mobile numbers linked to Aadhaar or trick biometric operators into passing Aadhaar authentication. In this case, Veerdharam’s documents and phone details were used to create a shell firm that issued fake GST invoices, putting him at risk for actions he never took.

2. What should you do if your identity is misused for GST fraud? Report it immediately. File a police FIR, alert your jurisdictional GST officer, and escalate the matter to CBIC. Request cancellation of the fraudulent GSTIN under Section 29(c), and preserve written records of all correspondence. If you’re working with a CA, have them check if your PAN is tied to any other unauthorised business registrations or IT filings.

3. How do GST authorities handle such cases? Following CBIC Instruction No. 02/2024-GST, officials now run risk-based assessments to flag suspicious registrations. They conduct physical verification, suspend and cancel fake GSTINs, and block input tax credit (ITC) linked to these accounts. In serious cases, assets may be attached, and cross-state coordination is led by a nodal officer to fast-track investigations.

4. How can regular individuals protect themselves from this kind of fraud?

Never share PAN or Aadhaar with unverified agents
Enable SMS and email alerts for all Aadhaar-linked activity
Regularly check your status on the GST portal and Income Tax website
Report suspicious OTPs or authentication requests immediately
Periodically review your credit report and tax account history with help from a CA

Don’t Wait for Fraud to Find You—Stay Vigilant

In today’s digital-first tax environment, identity protection is non-negotiable. If something seems off—whether it’s a surprise OTP or an unknown GST number tied to your PAN—act fast. Quick reporting can make all the difference between a minor disruption and a legal nightmare.