A bench of Justices D K Jain and H L Dattu said proper procedure was not followed by the state government in setting up the N N Mathur Commission and all the cases of alleged corruption could be probed by the Lokayukta.
The bench dismissed the petition of the state government which had approached the apex court challenging Rajasthan High Court's order setting aside the appointment of the commission.
Declaring the constitution of the Commission illegal, the High Court had directed that all the cases of corruption pending before the Mathur Commission be referred to Lokayukta.
The Gehlot government had constituted the N N Mathur Inquiry Commission by an order on Jan 23, 2009, to inquire into charges of abuse of power, loss to the state exchequer and corruption including misconduct, irregularities and misappropriation of funds from 2004 to 2008 when Raje was chief minister of the state.
Challenging the High Court order, the state government pleaded that the multi-member Commission was appointed to maintain a high standard of administration and to reinstate the public''s faith in governance.
It also submitted that the petition filed before the High Court challenging the constitutional validity of the state government order was in fact a ''political'' interest litigation.
The high court had on Jan 4, 2010 passed its verdict on a petition filed by Kashi Purohit and Krishan Murarilal Asthana challenging the constitutional validity of the government order appointing the Commission.