The Supreme Court of India has strongly criticized the Enforcement Directorate (ED) for what it termed as “crossing all limits” during recent raids in Tamil Nadu targeting the state-run TASMAC (Tamil Nadu State Marketing Corporation Limited). These raids were connected to alleged corruption in the liquor trade, but the apex court has now issued a stay on further proceedings, questioning the ED’s conduct and its implications for federal governance.
Background: The Alleged TASMAC Liquor Scam
In March and again in May, the ED conducted extensive raids on TASMAC offices and related premises under the Prevention of Money Laundering Act (PMLA). According to the ED, these operations uncovered massive irregularities, including:
- Alleged corruption in the transport of liquor.
- Manipulation in the awarding of bar licenses.
- Unaccounted cash worth ₹1,000 crore.
- Surcharges of ₹10 to ₹30 per bottle sold through TASMAC.
- Favoritism towards select distilleries in tendering processes.
The agency also claimed to have retrieved “incriminating data” during these searches, including cloned mobile phone data, which they allege point to widespread financial misconduct.
Supreme Court’s Intervention
The DMK-led Tamil Nadu government, which oversees TASMAC, approached the Supreme Court after the Madras High Court allowed the ED to continue its probe. A bench led by Chief Justice BR Gavai issued a stern warning to the federal agency, stating:
“You may register cases against individuals… but corporations? Your ED is passing all limits!”
The Court stayed further proceedings until after the court’s vacation, effectively halting any more immediate raids or investigative actions. This strong rebuke was a rare intervention that underscores rising concerns about the misuse of central investigative agencies.
Political Fallout: DMK vs. BJP
The court’s directive was welcomed by the ruling DMK. Former Rajya Sabha MP RS Bharathi described the order as a “blow to the BJP’s efforts to malign the state government.” Tamil Nadu Excise Minister S Muthusamy also slammed the ED’s raids, accusing the agency of political vendetta and harassment of state officials without presenting credible evidence.
In a counteroffensive, BJP’s K Annamalai alleged that Tamil Nadu minister V Senthil Balaji was the “kingpin” behind various scams, estimating the corruption to be well over ₹1,000 crore. He cited previous court observations regarding Balaji in separate money laundering cases. However, Balaji denied all allegations, asserting that TASMAC operates with full transparency.
A Test of Federalism?
The Supreme Court’s remarks have brought to the forefront a growing national concern: the central government’s alleged misuse of investigative agencies to target opposition-ruled states. Critics argue that the ED’s aggressive actions undermine the autonomy of state governments and violate federal principles enshrined in the Constitution.
Senior advocate Kapil Sibal, representing the Tamil Nadu government, highlighted during the hearing that the ED had cloned and seized multiple mobile devices without proper procedure — further deepening suspicions of overreach.
What Lies Ahead?
While the Supreme Court has stayed further ED proceedings for now, the controversy is far from over. The matter will return to the courts post-vacation, and both sides are expected to present stronger arguments.
For the DMK, the court’s intervention is a political win ahead of upcoming state assembly elections. For the BJP, which has often accused opposition parties of corruption, the allegations surrounding TASMAC provide a potent campaign narrative.
Frequently Asked Questions
1. What is the TASMAC liquor scam in Tamil Nadu?
The TASMAC scam refers to alleged financial and operational irregularities in Tamil Nadu’s state-run liquor distribution system, including favoritism in tenders, overpricing, and unaccounted cash flow estimated to be over ₹1,000 crore.
2. Why did the Supreme Court criticize the Enforcement Directorate?
The Supreme Court accused the ED of “crossing all limits” by targeting a state-run corporation and violating principles of federal governance, leading to a stay on further proceedings.
3. What is TASMAC and why is it important in Tamil Nadu?
TASMAC (Tamil Nadu State Marketing Corporation Limited) has a legal monopoly over liquor sales in the state. It is a significant source of state revenue and a major administrative entity.
4. What political impact does this case have?
The case has intensified the political rivalry between the ruling DMK and the BJP. DMK claims the raids are politically motivated, while BJP alleges deep-rooted corruption within the state government.
5. What happens next in the case?
The Supreme Court has put a temporary halt on ED’s actions. The matter will be heard again after the court’s vacation, where both sides are expected to present detailed evidence and arguments.
