He was arrested late last night in Panvel near Mumbai and a court in Pune today sent him to CBI custody till June 16.
The arrest prompted former Maharashtra Chief Minister and Congress leader Prithviraj Chavan to seek a ban on Goa-based radical Hindu group Sanatan Sanstha, which the Samiti has links with.
Sanatan Sanstha had come under the scanner for the murder of rationalist Govind Pansare in February 2015.
CBI lawyer B P Raju said it had proof that Tawade interacted with other suspects through emails. It had also been established in the investigation that a black motorcycle was used by the assailants who shot Dabholkar and Pansare, and Tawde had a similar bike, he said.
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Also, a witness had given a statement that Tawde had spoken against Dabholkar in 2004 and afterwards, he said.
Advocate Sanjiv Punalekar, Tawde's lawyer, said there was no need for seven days' custody as CBI had already grilled Tawde "for the last ten days" and there was no concrete evidence against his client.
Dabholkar, a noted anti-superstition crusader, was shot dead by unidentified assailants in Pune while he was out for a morning walk on August 20, 2013. The murder sent shockwaves through the state. In May 2014 Bombay High Court handed over the probe to CBI.
The agency had recovered some material during its earlier searches which brought the needle of suspicion to Tawde and Sarang Akolkar, against whom a Red Corner Notice was issued by Interpol in July 2012 in connection with the 2009 Goa blast case on the NIA's request, CBI sources said.
judge said considering the seriousness of the offence and the stage of investigation, custodial investigation was required.
During the hearing, when the judge asked Tawde if he was ill-treated after the arrest, he said he was slapped twice by a CBI official.
Tawade's arrest is being seen as a major breakthrough in the case which has remained unsolved for three years.
Following his arrest, Prithviraj Chavan said Sanatan Sanstha was a dangerous organisation and renewed the demand for a ban on it.
Chavan, when he was the Chief Minister (2010-2014), had sent a proposal to the Centre seeking a ban on the radical group after Dabholkar's murder.
Meanwhile, Abhay Vartak, Sanatan Sanstha's spokesperson, termed the arrest as an international conspiracy to malign the Hindu organisations in the country.
About Tawde's association with the Sanstha, Vartak said, "He is an ENT surgeon and used to come to our ashram for treating the sadhaks (disciples). He was a Sanstha member but was not holding any post.