The tax department’s inquiry, which began on January 15 and continued for nearly 131 hours, focused on how companies recorded the production and sale of dairy products such as ghee. Investigators reportedly found that adulterated ghee — which has a low real production cost — was being falsely documented in financial books as high-quality pure ghee to suppress reported profit margins, helping firms evade tax liabilities.

Among the businesses under scrutiny were Dauji Milk Food Pvt Ltd of the Dauji Group and Poddar Milk Products Pvt Ltd of the Poddar Group, both with operations linked to ghee and dairy product manufacturing. Additional searches included sites operated by Bhole Baba Milk Food Industries Ltd, the Ashish Agarwal group in Bikaner, and the Malani Group in Jodhpur, revealing a broad network of alleged tax avoidance within regional milk food industries.

As part of the probe, product samples from a Dauji Milk Food factory in Dausa were taken for analysis by the Food Safety and Standards Authority of India (FSSAI) after initial findings suggested the products were sub-standard. This regulatory connection highlights overlapping concerns about both financial fraud and product quality within segments of the dairy supply chain, potentially prompting further enforcement action beyond tax authorities.