Islam judges man's character by the degree of his belief and his favorable traits, and fervently struggles to strengthen these two factors. For instance, Islam has made man's faith a guarantee for the credibility of his statements when he executes an oath. According to the Islamic penal code, a Muslim's oath can replace evidence, under certain circumstances, and is therefore decisive in settling disputes. Islam has also made man's testimony a method for proving rights.
Thus, if lying appears in its red fearful shape-in any of the above mentioned cases, than it is clear how great damage can result form such behavior.
In the Holy Quran lying is considered to be an unforgivable sin.
"And never accept a testimony from them."
source : Title: Youth and Morals Author: Sayyid Mujtaba Musavi Lari