SC slams ED over ‘excessive’ TASMAC raids, halts further action in liquor trade probe

The Supreme Court on May 22 pulled up the Enforcement Directorate (ED) for "crossing all limits" in its handling of investigations into alleged corruption linked to Tamil Nadu's state-run liquor trade.

The apex court, expressing concern over federal overreach, ordered the central agency to halt further proceedings for now.

The criticism came during a hearing led by Chief Justice BR Gavai, in which the court took strong exception to the ED’s raids on Tamil Nadu State Marketing Corporation Limited (TASMAC) outlets in March and again last week.

The raids were based on accusations of corruption in liquor transport, the issuance of bar licenses, and financial irregularities involving distilleries and bottle-making firms.

"You may register cases against individuals... but corporations? Your ED is passing all limits! Issue notice, returnable after vacation," Chief Justice Gavai remarked while granting a stay on further ED action in the matter.

The DMK government, which had challenged an April 23 Madras High Court order permitting the ED's investigation, welcomed the SC's intervention. Former Rajya Sabha MP RS Bharathi called the ruling a "blow to the BJP’s efforts to malign the state government."

The Tamil Nadu government and TASMAC had approached the court following ED raids that allegedly involved the seizure and cloning of mobile phones.

Senior advocate Kapil Sibal, representing the state, highlighted this concern before the court.

Back in March, the ED claimed it had uncovered several irregularities in TASMAC’s operations and unaccounted cash worth ₹1,000 crore.

The agency also reported “incriminating data” related to staffing, tender allocations, and bar licensing, claiming there were manipulated tenders and surcharges of ₹10 to ₹30 per liquor bottle—reportedly imposed with the involvement of TASMAC officials.

The searches continued in May, with ten locations targeted under the Prevention of Money Laundering Act (PMLA). The ED alleged that it had discovered evidence of manipulated data indicating fraud during the award of tenders.

In response, Tamil Nadu Excise Minister S Muthusamy accused the ED of political harassment and targeting state officials for electoral gains.

“There is no proof of wrongdoing. These searches are politically motivated,” he said, reiterating CM MK Stalin’s support for state officials.

He emphasized that no evidence had been presented to justify the ED's allegations and termed the entire exercise as part of a broader pattern of political vendetta.

BJP’s former state unit chief K Annamalai weighed in on the controversy, alleging massive corruption and naming minister V Senthil Balaji as the “kingpin.”

“I believe (the scam) is over ₹1,000 crore. Senthil Balaji is involved in every single scam,” he claimed.

Balaji, for his part, rejected the accusations, defending the transparency of TASMAC operations.

“Everything is transparent... purchase orders are based on averages from the last three months and the last three years. No discounts are given arbitrarily,” he said.

The case has unfolded amid rising political tensions between the DMK and the BJP in Tamil Nadu, with Assembly elections expected next year.