The police said the incident occurred much after midnight at Darshan Hotel in Fartikui village of Dabhoi tehsil, some 30 km from Vadodara city. Those killed included four sanitation workers and three employees of the hotel.
The police told reporters that 47-year-old Mahesh Patanwadiya was the first to go inside the septic tank. Others outside got worried when he did not come out for some time despite being called by them. Ashok Harijan, 45, then entered to look for Mahesh, followed by 23-year-old Brijesh Harijan and Mahesh Harijan, 25.
When the four sanitation workers didn't come out, the three employees of the hotel, Vijay Chaudhary, Sahadev Vasava and Ajay Vasava, all 22 years old, went inside and reportedly fell unconscious and later died after inhaling toxic fumes.
Their bodies were pulled out after three hours of effort by fire brigade staff of the Vadodara Municipal Corporation who had to go there since the Dabhoi Municipality did not have the equipment to rescue the seven people inside.
An offence of negligence has been registered against the owner of the hotel, Hassan Abbas Bhoraniya, who was arrested in the morning.
The sanitation workers hailed from the nearby Thuvavi village.
The state government has announced financial assistance of Rs 4 lakh each to the kin of the deceased. In an official press release, the government stated that it had asked the police to initiate tough action against the hotel owner.
( With inputs from IANS )