Haveri (Karnataka), July 23, 2025 — A small-scale vegetable trader from Haveri district in Karnataka was left stunned after receiving a Goods and Services Tax (GST) notice demanding a payment of ₹29 lakh. The man, identified as Manjunath, runs a modest business with daily transactions that barely cross ₹1,000, yet the tax authorities have labeled him liable for lakhs in dues.
According to local sources, Manjunath had registered under GST a few years ago as per government guidelines, but his business never scaled to a level that required him to file substantial returns or pay significant taxes. Despite this, the notice claims he made transactions worth over ₹7 crore — a figure completely inconsistent with his daily operations.
The notice, issued by the state GST department, accuses him of evading taxes over multiple financial years. However, Manjunath maintains that he has no clue how such massive transactions were attributed to his name. He suspects that his GST number may have been misused by some third party.
“I am just a small vendor selling vegetables in the local market. I barely make enough to support my family. How can I be liable for ₹29 lakh in taxes?” Manjunath told local reporters. He further added that he never even used online billing or invoicing systems and doesn’t own a computer.
The incident has drawn criticism from several quarters, including trader associations and opposition leaders, who are questioning the transparency and accuracy of the GST portal. Local merchant bodies have called for an immediate investigation into how such discrepancies can occur in a digital tax system designed to prevent fraud and improve compliance.
Experts suggest that this may not be an isolated incident. Cases of GST number misuse and identity fraud have been reported in other parts of the country as well, where small or inactive businesses are allegedly used as fronts for fake invoicing scams by larger networks.
Earlier this year, the Central Board of Indirect Taxes and Customs (CBIC) had warned about rising cases of GST registration misuse, and launched a special verification drive. However, traders in rural and semi-urban areas still remain vulnerable due to lack of digital literacy and poor access to grievance redressal mechanisms.
Legal and tax professionals are now helping Manjunath prepare a formal response to the notice. Meanwhile, local officials have assured that they will re-examine the case and take action if any misuse is confirmed.
The case has once again raised concerns about the need for better safeguards for small traders who lack the resources to fight such legal and bureaucratic battles.
