A Special Chief Judicial Magistrate court in Meerut has granted 14-day judicial remand to an accused arrested in connection with an alleged Rs. 115-crore Goods and Services Tax (GST) evasion linked to online gaming operations.
The case, titled Union of India vs. Ashish Tyagi, arises out of proceedings under Sections 132(1)(a), 132(1)(f), and 132(1)(i) of the Central Goods and Services Tax Act, 2017 (CGST Act). The matter was filed by the Directorate General of GST Intelligence (DGGI), Ghaziabad.
Allegations of Online Gaming GST Evasion
According to the prosecution, the accused allegedly operated online money gaming platforms through entities including M/s Doton Infotech Pvt. Ltd. and M/s Riddhi Enterprises. Investigators claim that substantial sums—running into hundreds of crores—were routed through bank accounts linked to these firms.
The department alleges that while online gaming transactions attracted 28% GST on the full face value, the entities allegedly discharged tax only at 18% on commission income, leading to a purported GST liability exceeding ₹115 crore. However, the actual tax paid is stated to be negligible in comparison.
Investigators further claimed that forensic analysis of the accused’s mobile phone revealed usernames, passwords, and dashboard access credentials, along with records of communications and payment gateway interactions. Authorities have also alleged that incorrect HSN/SAC codes were used to misclassify the nature of business activity.
Arrest and Defence Arguments
The accused was arrested under Section 69 of the CGST Act. The prosecution submitted that grounds of arrest and related documents were served at the time of arrest on February 17, 2026, at 11:50 AM.
During the remand hearing, the defence opposed judicial custody and argued that the arrest was unjustified. It was contended that the accused had no directorship or operational control over the entities in question and that the allegations were baseless. The defence also claimed that necessary documents relating to the arrest and seizure were not properly furnished.
Court’s Observations
After perusing the case diary and materials placed on record, the court observed that prima facie evidence indicated financial transactions of significant magnitude routed through accounts connected to the accused. The order notes that more than ₹414 crore was allegedly received through online gaming operations and routed via payment gateways and bank accounts.
The court further observed that the accused’s mobile forensic report reflected control over certain operational credentials and communications relevant to the investigation. The order also records that summons and freezing instructions relating to bank accounts were found on the accused’s device, suggesting operational involvement.
In light of the seriousness of the allegations and the magnitude of the alleged tax evasion, the court found it appropriate to allow judicial remand under the relevant provisions of the CGST Act.
Remand Granted Till February 27
Allowing the application filed by the department, the Special Chief Judicial Magistrate remanded the accused to judicial custody till February 27, 2026, directing that he be produced before the court on the next date.
The investigation remains ongoing. The case adds to the growing scrutiny of GST compliance in the online gaming sector, particularly in light of heightened enforcement actions following recent clarifications and amendments relating to taxation of online money gaming platforms.
The department was represented by Special Public Prosecutor Lakshay Kumar Singh.
