Hyderabad Biryani Empire Faces Unprecedented Tax Evasion Investigation
For years, biryani has dominated India's culinary landscape as the undisputed champion of food delivery orders. Millions of plates are consumed annually, with the dish representing not just cuisine but cultural heritage in cities like Hyderabad. Here, biryani is both tradition and thriving industry, with local brands expanding from Old City kitchens to international franchises.
From Kitchen to Crime Lab: Biryani Enters Digital Forensics
In November 2025, this culinary staple entered an unexpected arena: the digital forensics laboratory of the Income Tax Department. What began as a routine survey of popular Hyderabad restaurants quickly escalated into one of the largest tax-evasion investigations in the city's food and hospitality sector.
Authorities conducted searches across nearly 30 locations connected to three prominent Hyderabad restaurant chains: Pista House, Shah Ghouse, and Mehfil. The investigation targeted kitchens, corporate offices, warehouses, and residential premises. Initial suspicions focused on sales suppression, but investigators uncovered something more sophisticated: a layered digital system allegedly designed to systematically erase cash transactions.
The Data Trail: Petpooja Platform Reveals National Pattern
The Hyderabad unit of the Income Tax Investigation Wing initiated their probe not with dramatic raids but with data analysis. Officials accessed transactional records from Petpooja, a widely used restaurant billing platform serving over 100,000 eateries nationwide.
Working from backend servers in Ahmedabad and analyzing data at Hyderabad's Ayakar Bhavan digital forensic lab, investigators processed 60 terabytes of billing information spanning six financial years from 2019-20 to 2025-26. This massive dataset covered approximately Rs 2.43 lakh crore in billing transactions across 177,000 restaurant IDs nationwide.
The initial red flag was statistically improbable: unusually high levels of cash invoice deletions clustered around month-end, typically 8 to 10 days before GST filing deadlines. Preliminary national estimates suggest restaurants using this platform suppressed sales turnover worth nearly Rs 70,000 crore over six years, with about Rs 13,317 crore attributed specifically to post-billing deletions.
Decoy Operations and the Cash Deletion Mechanism
Before conducting searches, officials executed decoy purchases at multiple outlets. Teams visited branches, paid via cash and UPI, then tracked what happened to these transactions. The billing software was designed to record every order internally, with entries remaining open until settlement to prevent waiter-level theft.
However, investigators allege management-level access allowed selective deletion after settlement. While UPI and card payments remained intact due to banking system linkages, cash transactions proved vulnerable. Entire blocks of cash invoices were allegedly erased from backend logs, with establishments claiming "cancelled orders" as justification. Officials found this explanation implausible, noting cancellation rates of 40 to 50 percent exclusively for cash payments.
The Bulk Delete Function: A Powerful Evasion Tool
Central to the investigation is what officials describe as a powerful bulk deletion feature within the billing system. This function allowed users to wipe bills within selected date ranges—sometimes up to 30 days—in mere seconds.
Unlike legitimate same-day corrections for errors, these deletions often occurred weeks or months later, frequently near financial year ends. In some instances, entire date ranges were reportedly erased within moments. Investigators also identified post-generation invoice modification, where bills worth thousands of rupees were allegedly reduced to nominal values long after transaction dates.
Using forensic reconstruction, officers recalculated turnover by adding deleted invoices and value reductions back into visible sales figures. These reconstructed totals revealed significant discrepancies when compared with declared income.
Upstream Investigation: From Restaurants to Raw Materials
By early December, the investigation expanded upstream to examine suppliers of rice and meat linked to the chains. Investigators matched three data layers: supplier dispatch records, restaurant purchase books, and reconstructed billing logs.
In one revealing case, while recorded quantities of mutton were reduced in books, associated costs were inflated to preserve output ratios. This discrepancy has become central to calculating the actual scale of suppression. A supplier in Hyderabad's AC Guards and Red Hills area was among those scrutinized, with investigators believing raw material manipulation and billing deletions created a closed loop concealing actual turnover.
Cash Discoveries and Financial Concealment Methods
Searches yielded substantial cash discoveries alongside documentary evidence. Approximately Rs 6 to Rs 10 crore was seized from premises linked to the three chains. In one instance, officials discovered a rented flat used solely to store cash in a locker, with no residents present.
Another finding involved multiple UPI IDs registered in employees' names. Different floors or service areas reportedly used separate QR codes linked to different accounts, though management allegedly controlled collections. These UPI IDs were rotated every two months to prevent large accumulations under any single individual, with cash withdrawn from these accounts handed over to management as off-book income.
Scale of Alleged Suppression and Potential Liabilities
Preliminary assessments suggest Pista House alone may account for Rs 250-300 crore of suppressed income, while Shah Ghouse and Mehfil together may account for approximately Rs 150 crore. Overall, the three chains are suspected of suppressing roughly Rs 600 crore in income over several years.
At an effective exposure rate of about 60 percent including tax and penalty, liabilities could exceed Rs 360 crore. Investigators believe these figures may rise once peak-season sales—particularly during Ramzan's haleem rush and extended dawn business hours—are fully analyzed.
International Links and Organizational Structures
The probe has also identified overseas investments in real estate, particularly in Dubai and other emirates, linked to some promoters. These findings may trigger separate information requests through international channels.
The organizational structures of the chains vary significantly: Pista House operates as a single-family promoter-driven enterprise with outlets across India, the United States, and the Gulf; Mehfil has expanded into the UAE while continuing aggressive domestic growth; Shah Ghouse reportedly operates through multiple companies controlled by family members.
Technology Arms Race and Enforcement Evolution
To analyze the massive dataset, the department deployed high-capacity forensic systems and AI tools, including generative AI. Approximately 15,000 GST numbers were mapped to restaurant entities using open-source information rather than waiting for official responses.
Ironically, digitization—intended to formalize India's economy—may have enabled new forms of structured evasion. The same software that prevented waiter-level theft allegedly facilitated management-level deletion. Officials believe current findings represent only a fraction of the industry, as the analyzed billing platform controls roughly 10 percent of the restaurant software market.
Implications for India's Restaurant Economy
India's food delivery boom has doubled the organized restaurant market in the past five to six years. From neighborhood tiffin centers to international franchises, billing systems, aggregator platforms, and digital payments have reshaped hospitality.
The biryani probe exposes a fundamental tension: while digitization increases scale, it also creates new backend vulnerabilities. If the estimated 27 percent suppression rate holds across similar systems, implications for GST revenue and income tax collections are substantial. More importantly, this case signals a shift in enforcement strategy—from physical raids to data-driven reconstruction.
A Dish, A Symbol, A System Under Scrutiny
Food critic Vir Sanghvi once described biryani as a mosaic—each grain distinct yet part of a whole. This metaphor now carries unintended resonance for India's restaurant economy, which similarly layers cash and digital transactions, formal and informal operations, small vendors and global franchises.
The crackdown reveals how quickly informal practices can re-enter the formal system through digital loopholes. The biryani boom remains real, but so does the tightening tax net surrounding it. The question is no longer whether evasion occurred in select outlets, but whether India's hospitality sector—one of its fastest-growing urban employers—is prepared for forensic-level scrutiny in an era where every invoice leaves a digital trail.
In a country that ordered 93 million biryanis online in a single year, that trail may be longer and more revealing than anyone imagined.
