🧾 SC’s TASMAC Rebuke: A Wake-Up Call for ED and a Victory for Federalism
By Advocate Amaresh Yadav
Last week’s Supreme Court stay on the Enforcement Directorate’s (ED) probe into TASMAC — Tamil Nadu’s state-run liquor distribution corporation — is more than just a procedural pause. It’s a sharp and necessary reprimand, sending a clear message: accountability does not mean overreach, and investigative muscle cannot override constitutional balance.
🏛️ What’s the Case?
The ED had swooped down on TASMAC offices in March 2025, claiming to probe ₹1,000 crore in alleged money laundering linked to liquor licenses and retail operations. Tamil Nadu government officials were accused of receiving bribes in exchange for allotments. The timing raised eyebrows — state elections are around the corner, and the central agency’s action seemed curiously well-synchronized with political fault lines.
But the Madras High Court wasn’t impressed. It restrained the ED’s actions and questioned both the legality and necessity of the raid. The matter reached the Supreme Court, which not only stayed the probe but used stern language, calling ED’s conduct “unnecessary”, “crossing all limits”, and a “violation of federal principles.”
⚖️ Legal Significance
As an advocate, what concerns me most is not just the overreach, but the normalization of overreach. The ED is supposed to step in where there’s an underlying (or “predicate”) offence — usually already established by other law enforcement arms. But here, the agency bypassed that threshold, making its involvement constitutionally questionable.
The SC reminded us that federalism is not a footnote in our Constitution; it is a pillar. Central agencies must be careful not to bulldoze state jurisdiction, especially when the alleged wrongdoing falls within state criminal law and administrative action.
🔍 ED and the Pattern of “Process as Punishment”
The real story is bigger than TASMAC.
Over the past few years, the ED has increasingly come under judicial scrutiny. From the Chhattisgarh liquor scam to the grilling of a former Haryana MLA for 15 hours, the Court has flagged concerns about misuse of the Prevention of Money Laundering Act (PMLA) and the troubling trend of using investigation itself as a tool of punishment.
In its 2022 ruling in Vijay Madanlal Choudhary v. Union of India, the SC upheld harsh provisions of PMLA but also emphasized the need for liberty safeguards and transparency. Sadly, it seems that advice was ignored.
The ED’s conviction rate remains dismal — less than 1% in a decade — yet its activity has exploded. In 2022, more than 95% of political leaders probed by the ED since 2014 belonged to Opposition parties. These numbers are damning not just statistically, but democratically.
🧭 The Way Forward: Due Process, Not Political Process
Let’s be clear: corruption in government institutions — including state-run enterprises like TASMAC — must be investigated thoroughly. But accountability cannot come at the cost of constitutional propriety. A federal structure demands mutual respect between Centre and States, not muscle-flexing by one at the expense of the other.
The ED needs to introspect. It must recalibrate its functioning to uphold transparency, ensure judicial oversight, and respect due process — not just as a legal formality, but as a democratic obligation.
The Supreme Court’s latest censure is not just a judicial rebuke. It’s an opportunity. The ED can choose course correction — or continue down a path that leads only to further erosion of public trust and institutional credibility.
Let law be the sword — not the shadow.
– Advocate Amaresh Yadav
Amaresh Yadav 
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