The searches continued till 10:30 pm. Sources said, Varma was already on the department's radar, and his name did not appear in the list of 132 Bollywood celebs who had been issued notices over the last one year for suspected tax evasion.
Varma's assistants said, his production houses were registered in Hyderabad, but in the scrutiny on Wednesday, service tax officials found there was no record of his production houses being registered anywhere, including Hyderabad.
Sources said, two of the 'ghost' companies are Dream Force Productions and Dream Force Enterprises.
A service tax official said: "We will scrutinise each of his projects to find out the amount of service and professional tax he has evaded.
"Film producers are liable to pay service tax as they sell their films and their satellite rights. Varma, being a director scriptwriter as well, is also liable to pay professional tax. We are recording his statement."
Sameer Wankhede, deputy commissioner, Service Tax, said, the scrutiny was on.
Sources said, Varma worked from Mumbai until 2008, but after a number of flops in Bollywood, he shifted to Hyderabad.
"He tried to dodge tax authorities by shifting base. Since last year, we have sent notices to 132 film personalities to pay their service tax, but the response has been poor. RGV's name didn't appear in the list at all, which made us suspicious. After a check we have found that his claim that the production houses are registered in Hyderabad is false," the official said.
One of Varma's assistants said the director was co-operating with the investigation, but refused to elaborate.
