Supreme Court Halts ED Probe into ₹1,000 Crore TASMAC Scam
The Supreme Court of India has stayed the Enforcement Directorate’s (ED) ongoing probe into the alleged ₹1,000 crore liquor scam involving the Tamil Nadu State Marketing Corporation (TASMAC). Delivering a sharp rebuke to the agency, the apex court on May 22, 2025, questioned its jurisdiction, citing violations of the federal structure and absence of a predicate offence necessary under the Prevention of Money Laundering Act (PMLA).
ED’s Allegations and Raids
The ED had initiated a series of raids on TASMAC offices in March and May 2025. The agency accused senior officials of financial irregularities, including manipulation of bar licenses, preferential supply contracts to select distilleries, and unaccounted cash flows in coordination with bottling units.
These actions were undertaken under suspicion of money laundering, with the ED claiming that proceeds of crime were being funneled through shell entities and laundered into real estate and other assets.
Supreme Court’s Strong Observations
A bench led by Chief Justice B.R. Gavai and Justice A.G. Masih pulled up the ED for exceeding its brief. “Your ED is crossing all limits. You are totally violating the federal structure. How can there be an offence against a corporation?” the Chief Justice asked pointedly during the hearing.
The court emphasized that liquor regulation and retail fall squarely under the State List, and hence, unless a clear predicate offence exists and is proven, the ED cannot invoke PMLA provisions against a state entity like TASMAC.
Political Reactions Escalate
The ruling DMK hailed the verdict as a significant check against the BJP’s alleged misuse of central agencies to target non-BJP ruled states. Senior leader R.S. Bharathi called it “a blow to the BJP’s narrative,” asserting that the ED had acted without legal backing.
Meanwhile, BJP’s Tamil Nadu chief K. Annamalai alleged that the scam involved massive corruption under the DMK regime. He claimed that former minister V. Senthil Balaji was the key orchestrator behind the siphoning of over ₹1,000 crore in liquor-related tenders and licensing deals.
What’s Next for the Case?
The Supreme Court has issued a formal notice to the ED and has paused all investigative proceedings until the court reconvenes after the summer vacation. The agency must now justify its actions and clarify the legal grounds of its intervention in a matter primarily governed by the state government.
This ruling could potentially set a precedent for how central agencies operate in state matters and how the judiciary defines the limits of federal oversight in corruption-related probes.
