The Tamil Nadu government has filed a petition before the Supreme Court challenging the Madras High Court’s decision to dismiss its plea against the Enforcement Directorate (ED) searches conducted at the Tamil Nadu State Marketing Corporation (TASMAC) headquarters.
The case revolves around an alleged ₹1000 crore liquor scam in the state. The ED conducted searches in March based on 41 FIRs filed by the Directorate of Vigilance and Anti-Corruption (DVAC). These FIRs alleged that distillery companies diverted unaccounted cash to obtain more liquor supply orders from TASMAC, a state-owned liquor marketing agency. Allegations also surfaced that TASMAC officials were involved in corrupt practices and that its retail outlets were collecting amounts above the Maximum Retail Price (MRP).
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On April 23, a Division Bench of the Madras High Court rejected the petitions filed by the State and TASMAC challenging the ED raids. The Court also dismissed the allegations that TASMAC employees were harassed during the searches.
“It is part of procedure to detain employees during surprise checks to prevent destruction of evidence. Allegations of violation of fundamental rights seem like an afterthought,” the Court observed.
While the case was pending before the High Court, both the Tamil Nadu government and TASMAC had also moved the Supreme Court seeking a transfer of the case from the Madras High Court. However, the apex court declined to entertain the plea at that stage.
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In the latest development, the ED has carried out further searches at multiple locations in Tamil Nadu, including the residences of TASMAC’s Managing Director S. Visakan and film producer Akash Baskaran. The MD was reportedly questioned for over 10 hours.
TASMAC submitted that the ED was conducting a “roving and fishing” inquiry without any substantial basis. It claimed that the ED acted on assumptions, lacked jurisdiction, and had not shared the reasons for its actions. It also alleged political motives, stating the actions were linked to the upcoming Tamil Nadu elections.
ED, on the other hand, argued that multiple FIRs suggested the involvement of TASMAC officials in bribery and manipulation of liquor prices and employee postings. The agency also maintained that:
“Suspicion is a valid ground for initiating searches. The Court cannot interfere at this preliminary stage or question the locations selected for search.”
The legal battle now shifts to the Supreme Court, where Tamil Nadu will challenge the High Court’s endorsement of the ED’s actions.
Case Title: THE STATE OF TAMIL NADU v. DIRECTORATE OF ENFORCEMENT, SLP(Crl) No. 007958/ 2025
