Udupi: Udupi Town police have arrested two persons in connection with an alleged misappropriation of property tax payments at the Udupi City Municipal Council (CMC) and cheating the government by issuing a forged receipt without depositing the amount.
The arrested have been identified as Shalini (56), a resident of Moodanidambooru village in Udupi, and Ganesh (24), a resident of Kukkikatte in Udupi. The accused were produced before the court following their arrest.
Alleged forged receipt and unpaid tax
According to the complaint filed by CMC Commissioner Mahantesh Hangargi, the incident came to light after a property owner, Anand Suvarna, paid ₹34,730 towards 12 years of property tax for Building No. 17-5 at Kalmady.
Police said Suvarna had allegedly handed over the amount to Shalini, who was working outside the municipal office premises. He was issued a receipt dated October 16, 2025, acknowledging the payment.
However, when the payment status was later checked online, the tax continued to show as pending. On further enquiry, Shalini allegedly admitted to having received the amount.
A fresh challan was subsequently generated on February 16, and ₹35,213 was remitted towards the property tax dues.
Allegations of collusion and misuse
The complaint further alleged that the earlier tax amount collected from the property owner was not deposited with the government. Instead, a Union Bank seal was allegedly used on the challan, and the funds were misused in collusion with others, resulting in cheating the government.
Police suspect that the forged receipt was issued to create an impression that the tax had been officially remitted, while the amount was allegedly diverted.
Following the complaint lodged by the CMC Commissioner, a case was registered under Sections 336(2), 336(3), 340(2), 318(4) read with 3(5) of the Bharatiya Nyaya Sanhita (BNS), which deal with cheating, forgery and related offences.
Investigation and arrest
The investigation was carried out under the guidance of Udupi Sub-Division DySP Belliappa and led by Police Inspector Mahesh Prasad P, along with PSI Gopalakrishna Jogi and other staff members.
After gathering documentary evidence and recording statements, the police arrested Shalini and Ganesh. Officials are examining whether similar instances of misappropriation occurred in other property tax transactions and whether more persons were involved in the alleged fraud.
Authorities stated that further investigation is underway to trace the flow of funds and verify the authenticity of documents used in the transaction.
The case has raised concerns about safeguards in municipal tax collection systems and the need for citizens to verify payments through official online portals.