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"I cannot defend such cases. If required, an inquiry may be initiated soon," Liezietsu told journalists on Thursday.
The IT sleuths in Kerala's Kochi have unearthed unaccounted money worth Rs 400 crore from the Sreevalasam Group firm owned by Pillai, who was working as a Consultant for the Nagaland Police's motor transport.
A President's Police Medal winner, Pillai, who retired as the Additional Superintendent of Police in 2010, came under the IT scanner post demonetisation.
However, Liezietsu confirmed that the Nagaland Police had already terminated Pillai's service as a Consultant.
"I do not have any knowledge of the happenings in the police department nor why Pillai was re-appointed as a Consultant after his retirement," he said.
Though the central IT Department has not yet apprised the state government on the case, Liezietsu said that the State Vigilance Commission has taken a sou motu case on the matter.
Meanwhile, Nagaland Public Rights Awareness and Action Forum (NPRAAF) has appealed to the Chief Minister to order a CBI probe in order to unearth the entire corrupt nexus.
"In spite of prima facie evidence established against Pillai, he was yet to be arrested. Therefore, it appealed to the Chief Minister to give the CBI a free hand in order to unearth the whole truth and to put those involved behind bars," said a statement issued by NPRAAF.
The Business Association of Nagas (BAN) has also demanded an investigation against people involved in recommending the President's Medal for meritorious service in 2005 to Pillai besides an investigation into violation of service rules to promote him as the Additional Superintendent of Police in 2010 "when he was due to retire in 2006 as per service rule".