Did Your Biryani Order Fuel Multi-Crore Tax Evasion? What Probe Into Billing Software Data Reveals

Last Updated:February 19, 2026, 12:50 IST

Investigators allege some restaurant chains used billing software that allowed selective deletion of invoices, especially cash sales, effectively shrinking their reported turnover

If you paid in cash for your biryani order, chances are that order may have fuelled a multi-crore tax evasion haven. Every time a customer paid cash for a plate of biryani, the transaction may have been recorded — and then quietly erased. Investigators allege that certain restaurant chains used billing software that allowed selective deletion of invoices, especially cash sales, effectively shrinking their reported turnover before filing tax returns. What looked like an ordinary food order may have helped create a parallel ledger system — one set of numbers for business operations, another for tax authorities.

The Income Tax Department’s investigation unit in Hyderabad has uncovered an extensive tax evasion scam involving popular biryani restaurant chains, and the fallout goes well beyond Hyderabad stretching all across India. An analysis into a billing software has pointed to underreporting of revenue to the tune of Rs 70,000 crore.

What Is the Scam?

According to a TOI report, by analysing huge amounts of data (about 60 terabytes) from a widely-used restaurant billing software used by over 1 lakh restaurants, authorities found that these eateries had been suppressing reported sales to avoid taxes since the 2019–20 financial year.

According to the report, investigators estimate that restaurants using the billing software under-reported turnover by at least Rs 70,000 crore. Of this, the software itself recorded about Rs 13,317 crore in deleted sales records (sales entered and later erased). In just Andhra Pradesh and Telangana, suppressed sales touched around ₹5,141 crore in the sample analysed.

The tax department had conducted raids at several biryani chains in Hyderabad in November 2025, focusing on major names such as Pista House, Shah Ghouse, and Mehfil. Teams searched outlets, corporate offices, software provider offices, and residences of people linked to these businesses.

Authorities seized approximately Rs 6 crore in cash from the premises and linked locations of these restaurant chains. Media reports also indicated that during the searches, officials recovered large amounts of cash, gold and asset-related documents from the homes of the owners of these chains — reportedly around Rs 20 crore in cash and significant amounts of gold along with records related to properties and other assets.

Officials alleged these restaurants were deleting cash sales and routing money through rotated UPI accounts to evade tax and GST liabilities. Preliminary estimates from this phase suggested around Rs 600 crore of unaccounted income, with further tax claims to be determined once full reconstruction of sales is complete.

How Underbilling Was Done Through Billing Software

According to the findings reported from the investigation by the Income Tax Department, several restaurants were entering all daily sales into their point-of-sale (POS) systems as usual — but later selectively deleting certain transactions before filing tax returns. All this was done through a billing software

In a normal restaurant setup, every order generates an invoice in the billing system. Whether a customer pays by cash, card, or UPI, the sale is recorded and becomes part of the outlet’s total turnover. That turnover determines how much GST and income tax the business must pay. However, investigators allege that some establishments targeted cash transactions for deletion. Because digital payments leave independent trails through banks and payment gateways, they are harder to suppress. Cash, on the other hand, exists only in the restaurant’s internal records once collected. If the corresponding invoice is deleted from the software, the official record of that sale effectively disappears.

The report suggests that the billing software used by many restaurants had features that allowed invoices to be deleted individually or even in bulk. In some instances, entire blocks of invoice numbers or date ranges could allegedly be wiped before returns were filed. This meant that a restaurant might legitimately record Rs 10 lakh in daily sales, but later erase a substantial portion of cash invoices, reducing the turnover reflected in tax filings. When repeated over months and years — and across multiple outlets — the suppressed turnover could run into hundreds of crores.

This means – the customer paid and received a bill. But if that invoice was later erased from the system, the corresponding revenue might not have been reflected in tax filings. Multiplied across outlets, cities and years, such practices — if proven — could create a substantial gap between real turnover and reported income.

How Investigators Cracked The Massive Evasion

The investigation reportedly gained momentum after authorities analysed massive volumes of billing data spanning several financial years. Using data analytics tools and AI-based pattern recognition, officials examined deletion patterns, invoice gaps, and mismatches between reported turnover and other indicators such as supplier purchases and banking activity. If a restaurant was buying raw materials consistent with high sales volumes but declaring much lower turnover in tax returns, it raised red flags. Similarly, unusually frequent deletion of cash invoices before GST filings suggested possible suppression.

Beyond the digital trail, search and seizure operations were conducted at certain Hyderabad-based chains. During these raids, authorities reportedly seized cash and examined financial documents and electronic records. While physical seizures draw public attention, the core of the case lies in reconstructing deleted sales and comparing actual business activity with what was declared to tax authorities.

What’s Next?

Nationwide Investigation: Initially focused on a few Hyderabad restaurants, the probe has expanded across India. The Income Tax Department is no longer just looking at a handful of outlets but is treating this as a systemic tax-evasion pattern in the restaurant and hospitality sector, particularly where similar billing software is used.

Suppliers and Raw Materials: The investigation has also moved beyond restaurants themselves. Tax officials have started scrutinising suppliers of key raw materials like rice and meat linked to these biryani chains. Officials have conducted inspections at the premises of these suppliers to check whether their records — such as quantities supplied and purchase prices — were manipulated to conceal actual restaurant output. The goal is to reconstruct actual sales volumes and uncover additional layers of suppression beyond deleted invoices.

Forensic and Data Analysis: While the initial raids uncovered cash and records, the core work now is digital forensic reconstruction of deleted records. Authorities are using advanced analytics and AI to track patterns of invoice deletion and mismatch between what was recorded on billing software and what was declared in tax filings.

They are also isolating features in the billing tools — such as ‘bulk delete’ functions — that may have been misused to systematically suppress turnover records. This phase is meticulous and takes months, as authorities compare billing logs, bank data, supplier purchases and GST returns to build a complete picture.

Tax Demands, Penalties and Notices: Once digital reconstruction is done, the next major action will be formal tax demands. The Income Tax Department will issue reassessment orders for income that was allegedly suppressed once it reconstructs figures. This would also trigger penalty notices and interest, which could multiply the liabilities well beyond the undeclared turnover. Because GST is tied to reported turnover, the Goods and Services Tax authorities are also expected to issue GST demand notices based on recalculated sales figures.

These notices have not been fully issued yet, as authorities are still verifying and finalising reconstructed numbers.

Software Firms Under The Radar: Beyond individual restaurants, investigators are said to be examining how billing software platforms were configured and whether certain tools enabled widescale misuse. This could lead to regulatory scrutiny or compliance changes for POS/billing software providers, including mandatory audit trails, restrictions on invoice deletion and enhanced reporting features for tax purposes.

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