TASMAC Liquor Scam: ED Raids Trigger Political Storm in Tamil Nadu
On Thursday, the Supreme Court of India strongly criticised the Enforcement Directorate (ED) for “crossing all limits” and undermining the principles of federalism, citing recent raids conducted on state-run liquor outlets in the Tamil Nadu liquor scam, both in March and again last week. The visibly displeased bench ordered the central agency to halt further action for the time being.
SC Criticizes ED for Undermining Federal Principles
The ED had carried out the raids based on allegations of corruption involving the transportation of liquor, the issuance of bar licences, and the generation of unaccounted cash through alleged collusion with distilleries and bottle-manufacturing companies.
Court Orders Temporary Halt on ED Actions
A bench headed by Chief Justice BR Gavai addressed the ED, stating, “You may register cases against individuals… but corporations? Your ED is crossing all limits! Issue notice, returnable after vacation.”
Meanwhile, the stay on further proceedings will continue,” the Chief Justice stated.
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ED’s Raids on Tamil Nadu liquor scam Shops
The ruling DMK welcomed the court’s direction. Former Rajya Sabha MP R.S. Bharathi told news agency PTI that the order was “a setback to the BJP’s attempts to tarnish the image of the state government.”
The Supreme Court was approached by the DMK-led Tamil Nadu government and the state-run Tamil Nadu State Marketing Corporation (TASMAC), which holds a monopoly over wholesale and retail liquor sales in the state. They challenged an April 23 ruling by the Madras High Court that allowed the Enforcement Directorate (ED) to proceed with its investigation into alleged irregularities.
Source: NDTV
Details of March and May Raids by ED
However, the ED faced sharp criticism after senior advocate Kapil Sibal informed the court that the agency had seized and cloned several mobile phones during its raids on March 14 and May 16.
In March, the ED claimed to have uncovered “multiple irregularities” in TASMAC‘s operations, including the discovery of “unaccounted” cash amounting to ₹1,000 crore.
The agency also reported finding “incriminating” evidence related to corporate postings, bar licences and transport tenders, and indent orders that allegedly favoured select distilleries.
Additionally, the ED cited evidence of fraudulent pricing practices, with TASMAC outlets allegedly levying illegal surcharges of ₹10 to ₹30 per liquor bottle — reportedly with the involvement of TASMAC officials.
Ten locations were searched under the Prevention of Money Laundering Act (PMLA), with the Enforcement Directorate (ED) claiming to have uncovered “manipulated data” suggesting cheating in the awarding of tenders.
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Tamil Nadu Government vs ED
In response, Tamil Nadu Excise Minister S. Muthusamy hit back, accusing the ED of targeting state government officials as part of a “political vendetta.” He alleged that the searches conducted at TASMAC offices in Chennai and other areas were driven by “ulterior political motives.”
Muthusamy emphasized that the ED had found no concrete evidence to support the alleged irregularities and reiterated that Chief Minister M.K. Stalin‘s administration stands firmly behind all state officials.
The reference to a “political vendetta” pertains to opposition allegations that the BJP routinely deploys central investigative agencies to target rival political leaders and parties, especially in the run-up to major elections.
The alleged TASMAC liquor scam has surfaced at a politically sensitive time, as the ruling DMK and the principal opposition, the AIADMK — along with its intermittent ally, the BJP — gear up for next year’s Assembly elections.
Amid the political storm over the scam, BJP leader K Annamalai, the party’s former Tamil Nadu unit chief, launched a sharp attack on state minister V. Senthil Balaji, branding him the “kingpin” of the alleged scandal.
I have my sources, and I believe the scale of corruption exceeds ₹1,000 crore. Senthil Balaji is implicated in every scam—he is the kingpin. Even the Supreme Court has raised questions about him,” the speaker alleged, referring to the court’s observations in a separate money laundering case involving the minister.
In response, Mr. Balaji has firmly denied all allegations, accusing the Enforcement Directorate (ED) of making baseless claims without presenting concrete evidence.
“Everything related to TASMAC operations is transparent,” he stated. “When it comes to procurement, the purchase order is determined by averaging the brand’s purchases over the past three months. This is further balanced with the average of the past three years and the last month’s purchase data. There has been no favoritism or discounts extended to anyone in the issuing of purchase orders.”
