“ED Crossing All Limits” SC Slams ED, Stays Probe Into ₹1,000-Crore Tasmac Liquor Scam
In a major setback to the Enforcement Directorate (ED), the Supreme Court on Thursday ordered a temporary stay on its probe and raids related to the alleged ₹1,000-crore liquor scam involving Tamil Nadu’s state-run liquor corporation, Tasmac.
The court’s decision comes after the Tamil Nadu government filed an appeal challenging the Madras High Court’s order allowing the ED probe to proceed. The appeal was heard by a bench headed by Chief Justice of India BR Gavai, who made stinging remarks against the central agency, accusing it of exceeding its jurisdiction and undermining the constitutional federal structure.
“The ED is crossing all limits. Law and order is a state subject. You can’t violate the federal structure,” CJI Gavai observed during the hearing.
The ED has been probing an alleged large-scale corruption case where private distilleries allegedly paid unaccounted cash bribes to secure liquor supply orders from Tasmac — Tamil Nadu State Marketing Corporation — leading to an estimated scam of ₹1,000 crore.
However, the Tamil Nadu government claimed it had already initiated criminal proceedings in the matter through the Directorate of Vigilance and Anti-Corruption (DVAC), which had filed 41 FIRs between 2014 and 2021 against individual Tasmac outlet operators.
The state accused the ED of “political vendetta” and asserted that the raids were unconstitutional and an overreach of the agency’s powers under the Prevention of Money Laundering Act (PMLA).
Legal Timeline
- April 23: Madras High Court permitted the ED to continue with its investigation.
- May 20: Tamil Nadu challenged the decision in the Supreme Court.
- May 22: SC stayed the ED’s actions, offering temporary relief to the state-run corporation.
The Supreme Court raised serious concerns about the ED’s interpretation of its mandate and the federal balance of power between the Centre and states. The Chief Justice’s observation is being seen as a landmark assertion of constitutional limits on central investigative agencies.
The ruling DMK government hailed the judgment as a “victory of federalism.” DMK spokesperson Saravanan Annadurai said, “The SC has stood for the Constitution and federalism today. The ED cannot act like a political tool of the Centre.”
Opposition parties, however, have demanded that the SC allow the ED to present its evidence before any conclusion is drawn.
