On what bases can Government Officials raid Bitcoin traders in India ?

On what bases can Government Officials raid Bitcoin traders in India ? Is Bitcoin trading or trading of Bitcoin Asic miners Illegal in India ?
As news came ED raids Gujarat Bitcoin traders , i was wondering , people already know before buying or trading that its not regulated by government officials and so how can government raid traders ?
In name of security are they trying to create rules so that they themselves can regulate this Bitcoin trading or trying to stop it as its competitor currency to governments official currencies ? After all Bitcoins started just because people started losing faith in governments and banks ! So just wanted to know on what bases can governments ban or disapprove Bitcoin Trading ?
Thanks and hoping someone would solve my mystery !
Also why all thinking it as virtual currency only ? If we buying it as commodity then ? Just like gold or silver , we buying a digital commodity who's price increase and decrease according to its demand , availability , difficulty to obtain etc ! People are buying it just on speculation that it would go high then what governments have problem in that ? Just like we buy gold and sell it or exchange it why cant Bitcoins cant be traded ? Just because government officials not getting their share in that transaction ?