Supreme Court Halts ED Probe Into TASMAC: A Test Case for India’s Federalism

Supreme Court Blocks ED’s Probe into TASMAC

Supreme Court Halts ED Probe Into TASMAC: A Test Case for India’s Federalism: The Supreme Court of India has issued a stay on the Enforcement Directorate’s (ED) investigation into the Tamil Nadu State Marketing Corporation (TASMAC). This move comes amid concerns that the ED is exceeding its constitutional limits and infringing upon the federal structure of governance. The court questioned the logic of targeting a government corporation, rather than holding individual officials accountable for alleged wrongdoing.

TASMAC: A Revenue Giant Under Scrutiny

TASMAC is a state-run monopoly overseeing the retail liquor business in Tamil Nadu, operating over 7,000 outlets. While it contributes significantly to state revenue, the corporation has been under fire for lack of transparency and alleged financial mismanagement. Initially created to regulate alcohol sales, TASMAC has often drawn criticism for functioning without robust oversight or public accountability.

Allegations of Massive Corruption

The ED began its probe following multiple FIRs filed by the Tamil Nadu Vigilance Department, citing corruption involving over Rs 1,000 crore. Allegations include overcharging customers, manipulating bar and transport licences, and kickbacks from liquor companies. Officials allegedly favoured certain firms during the tender process, bypassing basic KYC and eligibility checks.

The ED also uncovered bogus purchases, collusion between bottlers and distillers, and single-bid tenders, pointing to a deep-rooted network of financial fraud. Documents suggest that illegal profits were funnelled into unaccounted cash, allegedly involving several politicians.

Politics and Power Struggle

This investigation comes at a politically sensitive time, with Assembly elections approaching in Tamil Nadu. Chief Minister M.K. Stalin has strongly opposed the ED’s involvement, calling it an attempt by the central BJP government to intimidate the DMK-led state. Many view the investigation as politically coloured, reflecting the ongoing tensions between the Centre and states over the role of central investigative agencies.

A Turning Point for Federal Jurisdiction?

By halting the ED’s actions, the Supreme Court has drawn attention to the constitutional balance between state and central powers. The court’s intervention may set a legal precedent in determining how far central agencies can go in probing state-run entities. It raises important questions about federal integrity, institutional overreach, and the limits of central authority in a federal democracy.

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