On May 22, 2025, the Supreme Court of India issued a significant order staying the Enforcement Directorate’s (ED) investigation into the Tamil Nadu State Marketing Corporation (TASMAC), the state-run liquor distribution agency. The Court criticized the ED for “crossing all limits” and violating the federal structure of the Constitution, questioning the agency’s authority to initiate criminal proceedings against a state-owned corporation.

The ED’s probe, which alleged a ₹1,000 crore scam involving TASMAC, was based on claims of collusion between distilleries, bottlers, and officials to sell liquor above the maximum retail price. However, the Supreme Court highlighted that the ED had not identified a specific predicate offense, a necessary condition under the Prevention of Money Laundering Act (PMLA), and noted that the state government had already filed 41 FIRs against individuals related to the case.

The ruling has been welcomed by the ruling DMK party in Tamil Nadu, which accused the BJP-led central government of misusing the ED to target political opponents. DMK leaders described the Supreme Court’s decision as a victory for justice and federalism.

The Supreme Court has directed the ED to file a detailed response within two weeks. The stay on the investigation is interim, and further proceedings will depend on the Court’s review of the ED’s submissions.

Sources