ED vs Tamil Nadu: Supreme Court to Decide Fate of TASMAC Liquor Scam Raids

The Tamil Nadu government has taken its battle to the Supreme Court following the Madras High Court’s refusal to entertain its plea against the Enforcement Directorate’s (ED) searches at the headquarters of Tamil Nadu State Marketing Corporation (TASMAC). This legal clash revolves around the ongoing investigation into an alleged Rs.1000 crore liquor scam.

The controversy began when the ED conducted raids in March, uncovering allegations that distillery companies siphoned off substantial amounts of money, reportedly in the form of unaccounted cash, to secure more supply orders from TASMAC. The state-run liquor marketing body was further accused of inflating the prices of liquor bottles beyond the Maximum Retail Price (MRP), leading to public concerns about widespread corruption within the system.

TN challenges HC's rejection of plea against ED's TASMAC raids in Rs.1000 crore scam.

The Allegations and Legal Battle

The case is based on 41 FIRs filed by the Directorate of Vigilance and Anti-Corruption (DVAC) regarding corruption in TASMAC. These FIRs accuse TASMAC officials of being involved in various fraudulent practices, including taking bribes and manipulating transfers of employees for personal gain.

In response, the ED initiated an investigation and registered a case under the Prevention of Money Laundering Act (PMLA). As part of this probe, the ED raided TASMAC's headquarters, leading to the seizure of multiple documents and evidence suggesting corruption. During the raid, TASMAC Managing Director, S Visakan, was questioned for over 10 hours. The ED also conducted additional searches at various locations in Tamil Nadu, including the residence of film producer Akash Baskaran, who is reportedly linked to the case.

Madras High Court's Ruling and State Government's Response

On April 23, 2025, a Division Bench of the Madras High Court dismissed the petitions filed by the Tamil Nadu government and TASMAC, challenging the ED's raids. The Court ruled that the detention of TASMAC employees during the searches was a routine procedure, necessary to prevent evidence from being tampered with. It also found no merit in the claim that the employees’ fundamental rights had been violated.

Despite this ruling, the Tamil Nadu government and TASMAC approached the Supreme Court, requesting the transfer of their plea against the ED's searches from the High Court. However, their request was not entertained by the Supreme Court. Now, the fate of the ongoing investigations lies in the hands of the apex court, which will ultimately decide whether the ED's actions against TASMAC will continue or be curtailed.

TASMAC’s Defense vs ED’s Investigation

TASMAC has argued that the ED’s searches were unjustified and based on flimsy grounds. The state-run liquor body contends that the agency lacked sufficient evidence and only relied on assumptions to conduct the raids. TASMAC further alleged that the ED’s actions were politically motivated, with the agency intending to tarnish the image of public figures ahead of the Tamil Nadu elections. The corporation also challenged the ED’s jurisdiction, arguing that the agency only had the authority to investigate scheduled offences under the PMLA, and that no such offences had occurred.

On the other hand, the ED maintains that the search was a necessary action, backed by credible FIRs and evidence pointing to serious corruption within TASMAC. The agency contends that the employees' involvement in bribery, price manipulation, and illegal activities warranted the searches. ED further emphasized that mere suspicion is enough to initiate searches and that the court had no authority to question the agency's procedural decisions.

The Supreme Court's Role

As the case now heads to the Supreme Court, the question remains whether the ED’s searches at TASMAC will be upheld or whether Tamil Nadu’s government will succeed in halting the ongoing probe. The outcome of this legal battle will have significant ramifications for the state's liquor distribution system and could further fuel political controversy ahead of the upcoming elections.

For now, both the Tamil Nadu government and the ED are awaiting the Supreme Court's decision, which will determine the future of the TASMAC liquor scam investigation.