According to Sushil Solanki, Commissioner of Service Tax, the Managing Director of Ashco Niulab, Ashok Kotwani, was arrested for evading service tax to the tune of Rs 4.6 crore.
Sources said that Kotwani had not remitted his dues since April, 2007.
"Between April, 2007, and September, 2013, he evaded above Rs 4 crore in taxes. We are investigating further liabilities on him from October, 2013, till date," said a source.
The official said that the department has already attached the firm's Noida office over the service tax dues.
Involved in the day-to-day running of the company, Kotwani was fully aware of the tax liability and hence was arrested, he added.
After his arrest by the Service Tax Department, a metropolitan magistrate court here has remanded him in judicial custody till March 3.
Kotwani has moved a bail application which is to be heard on Wednesday.