The Principal Director of Audit (Central), Chandigarh, has flagged major financial irregularities in the works executed by the office of the executive engineer, Electrical Division No. 3. The audit revealed that the project for providing streetlights through underground cabling on the slow carriageway witnessed a steep price escalation of 44.75% from the original tendered amount.
According to audit report, the inspection of the Electrical Division No. 3 accounts for the period April 1, 2022, to March 31, 2024, was conducted between March 26 and April 2, 2025 by a team from the Principal Director of Audit (Central), Chandigarh.
The tender work for providing streetlights through underground cables on the slow carriageway from Tribune Chowk (Junction 38) to Poultry Farm (Junction 39) was awarded to a Pinjore-based firm. As per the Detailed Notice Inviting Tender (DNIT) dated March 22, 2022, the contract worth ₹30,04,430—39.95% lower than the administrative approval of ₹50,04,047.43—was awarded, and the work was completed on October 31, 2022.
However, during scrutiny, auditors observed that the final work cost escalated by 44.75%. Extra items worth ₹4,49,706 and ₹5,24,617 were approved by the executive engineer (XEN) and the superintending engineer (SE) respectively, while deviation approval worth ₹4,26,304 was granted by the XEN. The total project value was thus finalised at ₹43,49,110.67, far exceeding the permissible 20% variation allowed under departmental norms.
The report stated, “Had the DNIT been prepared properly, the work could have been completed at competitive rates. The malpractice of adding non-scheduled items would also have been minimised.”
In addition, the audit highlighted an irregular payment of ₹2,63,769 towards IGST to the contractor. Under Section 39 of the GST Act, 2017, every registered person must file periodic returns. However, online verification revealed that the contractor had not filed GST returns for 2023–24 and 2024–25, and their GST registration was cancelled effective April 5, 2023.
Despite this, the Electrical Division paid ₹20,41,389 to the contractor for works executed between August 2023 and June 2024 and deducted ₹34,854 (2%) as TDS on GST. The audit also noted that the contractor’s final bill claim of ₹1,92,603 remained pending.
Moreover, the audit found that the GST challan did not mention the name of the principal employer, raising concerns about possible misuse of these challans in other government or private departments. The report categorised the payment of ₹2,63,769 as “unverified.”
The audit office noted that no reply had been received from the Electrical Division on the matter, and final action was still awaited.
