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Critical Topics and Their Significance for the UPSC CSE Examination on May 24, 2025

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Directorate of Enforcement (ED)

For Preliminary Examination:  Current events of national and international significance

For Mains Examination: GS II - Indian Polity and Governance

Context:

Warning the Enforcement Directorate that it was “crossing all limits” and “violating the federal structure”, the Supreme Court Thursday stayed proceedings in the agency’s money-laundering investigation into government-run liquor retailer Tamil Nadu State Marketing Corporation (TASMAC).

Read about:

Directorate of Enforcement (ED) comes under which Ministry or Organisation?

 Enforcement Directorate is a statutory body-True or False?

Key takeaways:

• The Enforcement Directorate (ED) initiated a case under the Prevention of Money Laundering Act (PMLA) based on accusations of corruption and procedural violations in Tamil Nadu's liquor distribution system. In March, the ED carried out raids at various sites, including the TASMAC headquarters. Following the Madras High Court’s refusal to provide relief, both the Tamil Nadu government and TASMAC approached the Supreme Court.

• On April 23, the Madras High Court rejected the petitions from the Tamil Nadu government and TASMAC that contested the ED’s searches. The court also dismissed allegations that ED personnel had mistreated TASMAC staff during these operations.

• Established in 1956, the ED gained prominence after the PMLA came into effect in 2005, having been enacted in 2002.

• A Supreme Court bench led by Chief Justice B R Gavai and Justice A G Masih, while reviewing the Tamil Nadu government's appeal against the ED’s actions at TASMAC, instructed the ED to submit a response within two weeks.

• Representing the state, Senior Advocate Kapil Sibal explained that the government itself had filed 41 FIRs between 2014 and 2021 against individuals who were allegedly accepting cash at liquor outlets — not against TASMAC. He noted that the ED only became involved in 2025 and subsequently raided the agency’s main office.

• In response, Chief Justice Gavai questioned Additional Solicitor General S V Raju, who represented the ED, about the legitimacy of bringing criminal charges against an institution rather than specific individuals.

• The Supreme Court ordered a temporary halt on any further legal proceedings against the petitioners until the matter is reviewed.

• Senior Advocate Mukul Rohatgi, representing TASMAC, alleged that the ED had seized and cloned employees' phones during the investigation

Tamil Nadu State Marketing Corporation (TASMAC)

• The Tamil Nadu State Marketing Corporation, commonly known as TASMAC, is a state-owned enterprise that holds a monopoly over wholesale and retail vending of alcoholic beverages in the Indian state of Tamil Nadu.
• Established in 1983, TASMAC was created with the primary objective of regul