ED vs. TASMAC: Tamil Nadu moves Supreme Court for transfer of case from Madras High Court to SC

The State of Tamil Nadu has approached the Supreme Court seeking transfer of the case concerning Enforcement Directorate (ED) raids at the premises of State-owned Tamil Nadu State Marketing Corporation (TASMAC) from Madras High Court to the top court..The Tamil Nadu government has highlighted that the matter concerns the legality of search and seizure operations carried out by the ED at the TASMAC premises, including whether the ED can seize mobile phones/ electronic devices of TASMAC employees and extract data from such devices without consent or a judicial warrant. The State has also questioned whether the ED could have held back the TASMAC employees for over 60 hours during these raids. It had earlier moved the High Court over the same.In arguments made before the Madras High Court, the State had alleged that the ED had barged into the TASMAC premises without offering a proper explanation and prevented the employees from leaving for over 60 hours. Women employees were allowed to leave past midnight, on the condition that they return at 8-9 AM the following day, the State had contended. However, the Madras High Court Bench, which was initially hearing the case, recused from the matter.The State has now moved the Supreme Court arguing that all the acts by ED were done in violation of procedural safeguards. In this regard, the State has claimed that the ED failed to provide copies of the ECIR, seizure memos, hash values or search warrants.According to the plea, similar concerns about the ED's digital search protocols have already been raised before the Supreme Court in certain other cases such as a plea by the Foundation of Media Professionals and a case concerning news outlet NewsClick, and these matters are pending before the Court..In view of this, the State has urged the Supreme Court to hear the petitions challenging the ED raids against TASMAC as well so as to ensure judicial consistency and avoid conflicting decisions. .ED raids were carried out at the TASMAC's headquarters in Chennai, as well as multiple distilleries and bottling units across Tamil Nadu from March 6 to March 8. The agency alleged financial irregularities amounting to over ₹1,000 crore, citing issues such as tender manipulations, unaccounted cash transactions and overpricing at retail outlets.The ED alleged that TASMAC retail outlets were allegedly charging customers ₹10-30 more per liquor bottle than the mandated maximum retail price (MRP), suggesting a systematic overpricing strategy.Following the raids, the ED claimed to have uncovered substantial evidence of collusion between distilleries and TASMAC officials, allegedly leading to the misappropriation of State revenue. According to ED, distilleries collaborated with bottling companies to inflate expenses artificially and record fictitious purchases. This scheme allegedly facilitated the diversion of substantial unaccounted funds, which were then used to bribe TASMAC officials to secure favorable supply orders.The ED also claimed that there were irregularities in the allocation of transport and bar license tenders..The allegations triggered political tensions in Tamil Nadu, with the opposition Bharatiya Janata Party (BJP) staging protests, demanding transparency and action against corruption. The ruling Dravida Munnetra Kazhagam (DMK) party criticised the ED’s involvement, alleging that the Central government was using its investigative agencies to further political vendetta..Both the TASMAC and the State eventually filed petitions before the Madras High Court, contending that the ED’s raids were excessive and beyond its jurisdiction. The State argued that the ED could not have "barged in" to the TASMAC premises in Tamil Nadu, without first getting the State's consent..The matter was first heard on March 20 by a High Court Bench of Justices MS Ramesh and N Senthilkumar, which expressed alarm over allegations that the ED "took control" of TASMAC premises and forced employees to stay back for long hours.The Bench also questioned whether the plea filed by the State in the matter should be amended to narrow down its scope. The State, in turn, agreed to tailor their plea to make it more specific. However, when the matter came up for hearing on March 25, the Bench recused itself from hearing the case.Subsequently, the matter came up before a Bench of Justices SM Subramaniam and K Rajasekar on April 1, which issued notice and said it would hear the case on April 8 and April 9. The new Bench also made some observations favourable to the agency."Government has to fight against corruption. Suppose the money laundering - it is only allegations - it is for some reasons to believe," the Bench had orally remarked at the time.