The diameter of the cylindrical tank is $7$m, so the radius $r = \frac{7}{2}$m. The height $h = 2$m. The volume (capacity) of the cylinder is given by $V = \pi r^2 h$. Substituting the values, $V = \frac{22}{7} \times (\frac{7}{2})^2 \times 2 = \frac{22}{7} \times \frac{49}{4} \times 2 = \frac{22 \times 7 \times 2}{4} = \frac{11 \times 7 \times 2}{2} = 77$ cubic m. Since $1$ cubic m $= 1000$ litres, the capacity in litres is $77 \times 1000 = 77000$ litres.