T-SQL SYNTAX ISSUE - using OR in CASE statement

Based on your edits, you don't even need an OR statement:

CASE 
    WHEN @var1 IN ('99', '22')                
    THEN                         
         (CASE @var2                 
          WHEN 'All' 
          THEN col1                 
          ELSE @var2                 
          END) 
    END 

DECLARE @Variable INT;
SET @Variable = 1;

SELECT
    CASE
        WHEN @Variable = 1 OR @Variable = 2 THEN 'It is 1 or 2'
        WHEN @Variable = 3 THEN 'It is 3'
        ELSE 'It is not 1, 2, or 3'
    END AS [SomeField]

MSDN docs for CASE, OR, and Expressions.