2.37.    Payment must be required in all cases in respect of services rendered to any Foreign Government, or non-Government body or institution, or to a separate fund constituted as such either inside or outside the Public Account, unless Government by general or special order, gives directions to the contrary. Relief in respect of payment for services rendered or supplies made to any outside body or fund, should ordinarily be given through a grant-in-aid rather than by remission of dues.




2.38.    (1) The conditions under which a department of Government may make charge for services rendered or articles supplied by it and the procedure to be observed for the settlement of such charges are regulated by the directions referred to in Appendix 3 of the Punjab Financial Rules, Volume II.


(2)        Except in regard to transactions affecting the accounts of commercial departments and undertakings or allocation to capital heads adjustments between different departments of Government should be restricted to the narrowest limits. Such adjustments, when they are essential should, as far as possible, be based on lump sum figures fixed for a period of three years with reference to some suitable formula easy of application and maintained for a series of years. Elaborate or meticulous calculations should also be avoided as a general rule.


Note-1 Under the directions contained in account code. Volume IV, inter-departmental other adjustments are not to be made in the accounts of the past year if those could not have been In all cases, where an adjustment could have been reasonably anticipated, as for example recurring, payments to another Government or department and payments which, though not fixed amount are of fixed character, etc. the Accountant General will automatically make the adjustments in the accounts before they are closed. The ones of proving that the adjustment could not have been reasonably anticipated, should lie with the controlling officer.


Note -2 The Provisions of rule 2.36 apply mutatis mutandis to transactions between commercial and non-commercial departments as they apply to transactions between Union and State Governments.


Note - 3 - For other transactions of the Government involving fractions of a rupee, the provisions of rule 4.10 S.T.R. will be observed.






2.39.    The instructions given in the Punjab Subsidiary Treasury Rule 4.11 regarding erasures and overwriting in vouchers apply mutatis mutandis to erasures and overwriting in accounts, registers, cashbooks, schedules, etc.


Note - The detailed procedure to be followed in the correction of errors in accounts of the Public Works and Forest Departments is laid down in Account Code, Volume III.




2.40.    The provisions of sub-rule 6 below Subsidiary Treasury Rule 2.8 apply mutatis mutandis in respect of the issue of duplicates of copies of receipts granted for money received or duplicate or copes of bills and other documents for the money paid by Government employees in general.


            In the case of a bill passed by the Drawing Officer/Controlling Officer for presentation at a treasury but lost either before payment or before presentation at the treasury, the Government Officer who drew the original bill shall ascertain from the treasury that payment has not been made on it before the issues a duplicate thereof .




2.41.    All letters or orders, sanctioning expenditure, appointments, etc., must be signed by the sanctioning authority personally or by a Gazetted Government employee authorised to sign for him. Similarly ‘copies’ of sanctions signed by a non-Gazetted Government employee are not sufficient for audit purposes and will be returned for authentication by a Gazetted Government employee.




2.42.    (a) All references by Government employees on personal matters, such as leave, leave salary, pay, increments, funds, subscriptions, house-rent, posting etc., must be submitted in covers stamped with ordinary postage and not with service postage stamps. This rule applies only to the letters of Government employees regarding their own personal matters. When, however, references are forwarded officially by a superior officer the letter should be treated like any other official communication.


(b)        All telegraphic messages regarding personal matters referred to in clause (a) above or other analogous matters must be paid for by the persons sending them. When a telegraphic reply is required on any such matter the reply should always be pre-paid.


(c)        This rule applies also to the use of telephone for trunk calls.


(d)        When it comes to the notice of audit that a letter, telegram or trunk-call has been made at Government expense instead of at the expense of the officer concerned recovery should be made from the next pay bill of the officer who should be informed of the reasons for the recovery. If the officer wishes to object to the recovery, he must take up the matter with the Accountant-General through his controlling officer, who may, if he desires, obtain the orders of Government through the Head of the Department.




2.43.    Vouchers once received in the Accounts Office will not be returned except for very cogent reasons. Accordingly, when application is made for the return of any vouchers, the reasons for the request should invariably be stated.




2.44.    (a) General rules and principles for the guidance of authorities who have to enter into contracts or agreements involving expenditure from State revenues have been given in Appendix 4.


            (b)        The authorities who are empowered to execute deeds, contracts and other instruments on behalf of the Governor of Punjab are contained in the list issued by the Home Department in their Notification No. SO. 157/Const/Art. 299/65, date 7th July, 1965, as amended from time to time.


Note-   No contract or agreement to execute a contract shall be executed or entered into and no tenders for a contract shall be accepted without previous consultation of the Department of Finance if expenditure of money or abandonment of revenue is involved thereby for which previous consultations of the Departments of Finance is required.





2.45.    No grant of land or assignment or revenue, or concessions, grant, lease or licence of mineral or forest rights or right to water posers, or any easement, or privilege in respect of such concessions may be authorised or relinquishment of revenue allowed except with the sanction of the competent authority.

            Supplementary instructions in regard to agreements relating to these matters are contained in Appendix 4.





2.46.    The Amounts at credit of subscribers, compulsory or optional, to a Provident Fund, are under section 2(a) of the Provident Fund Act, 1925 compulsory deposits and are therefore, protected from attachment by a court of law under section 3 ibid. Claims by Government are not, therefore, compulsorily and without the subscriber’s consent recoverable from the balance at his credit.




2.47.    The following instructions apply in respect to claims against the Railway for goods lost in transit: -


(1)        Such cases are governed by section 91 of the Contract Act. When the buyer orders goods from the seller, delivery to the Railway by the seller has the same effect as delivery to the buyer, provided that the delivery has been made in the manner laid down by the Railway Rules and the consignor is absolved from liability as soon as he has made delivery in such a way that the Railway is responsible to the consignee. On the other hand, disregard of Railway rules such as those dealing with declaring the nature of the goods will clear the Railway of all liability and in such a case, delivery to the Railways does not amount to delivery to the consignee. It follows that if the delivery is made in such a way that the Railway is responsible to the consignee, it is for the consignee to se the Railway in case of loss. If this has not been done then the consignor must sue. In the former case the consignee is liable for the price of the goods, in the letter case, he is not.


(2)        It is open to a buyer to contract with the seller that the price of the goods is not payable until the goods has been received and examined, and the stipulation to this effect should normally be made in all cases where Government is the consignee. Payments prior to verification of quantify and quality of materials should be resorted to in very exceptional cases only, and then only with an agreement beforehand to ensure Government against all losses in event of the goods received being short and defective. Such payments are to be classed as advances. Such Contracts between buyer ad seller do not, however, affect the Railway or the question who is the proper person to sue Railway in case of lose.


(3)        It is immaterial as regards the question who is to sue Railway in case of loss in transit, whether the goods are consigned at owner’s risk or railway risk. In either case, the consignee has to sue, but if he has instructed the consignor to book at Railway risk and the latter has booked at owner’s risk then the consignee will have a further remedy, i.e., one against the consignee as well as one against the Railway; he can sue the consignor for the amount which the Railway has succeeded in escaping from the necessity of paying in virtue of the “owner’s risk contract.


(4)        It follows from the above principles that when the Government is the consignor great care should be exercise to ensure compliance with -


(a)   Railway requirements ; and

(b)  requirements of the consignee as to class of risk note.





2.48.    The rules regarding the destruction of records appertaining to the accounts audited by Indian Audit Department are contained in Appendix 5 to these rules. The period will reckon from the termination of the complete years to which the records pertain.


Note - For instructions regarding the destruction of records in the department of Public Works see paragraph 1.159 of the Public Works Department Code.


2.49.    Cancelled. (in previous Edition)




2.50.    In all official documents number should invariably be marked off as follows :-

(1)  In case of rupees-according to the Indian system of numeration, that is, after ten thousands, in lakhs, crores etc.

(2)  In other cases, according to the English system of numeration, that is, after ten thousands, in hundreds thousands millions, etc.





Cancelled (in Previous Edition)




(Referred to in Rule 2.34)






With the exceptions noted below, any loss of public money, departmental revenue or receipts stamps, opium, stores or other property held by or on behalf of other office or department, should be immediately reported by the officer concerned to his immediate official superior as well as to the Accountant-General, even when such loss has been made good by the party responsible for it. It will usually be sufficient if the officer reporting the defalcation or loss to higher authority sends to the Accountant-General either a copy of his report or such relevant extracts from it as are sufficient to explain the exact nature of the defalcation or loss and the circumstance which made it possible. Such reports must be submitted as soon as a suspicion arises that there has been a loss ; they must not be delayed while detailed enquiries are made. When the matter has been fully investigated further a complete report should be submitted about the nature and extent of the loss, showing the error or neglect of the rules by which the nature and extent of  the loss, showing the error or neglect of the rules by which such loss was rendered possible, and the prospects of effecting a recovery. The submission of such a report does not debar the local authorities from taking any further action which may be deemed necessary.


(2)        If the irregularity by detected by Audit in the first instance then Accountant General will report it immediately to the administrative authority concerned and if he considers necessary, to Government as well.


Exception - Petty cases, that is, cases involving losses not exceeding Rs. 200 each need not be reported to the Accountant-General unless there are in any case important features which merit details investigation and considerations.


In the case of Bhakra Dam Project, the above limit of Rs. 20 is raised to Rs. 2,000 for losses caused to machinery by accidents subject to the following conditions :-


(i)     in respect of losses up to Rs. 2,000 for which separate estimates are prepared the circumstance leading to the loss, the fact as to whether the loss was due to negligence of any official, and the action taken in that case, should be clearly stated in the reports of the estimates ;


(ii)   The Divisional Officers should send to the audit office annually a consolidated list of losses up to Rs. 2,000 for which separate estimates are prepared, so that these may be exhibited in the Appropriation Accounts.


Note 1. Losses or deficiencies concerning buildings, lands, stores and equipment should be written off any value or commercial account that may be maintained.


Note 2 In case of a loss in which there is a possibility of the Reserve Bank being made liable to Government either in respect of operation on Government account conducted by itself or by its agents or otherwise, the Accountant-General will call for such further information as he may require on the subject. On receipt of this further information which must be obtained without delay he will at once make a report to the Department of Finance. If there is any doubt or dispute as to the facts or the liability, the Department of Finance will arrange with the authorities concerned or an officer of the Reserve Bank and of the State Bank of India if the lost is in respect of an operation under its agency and of Government to be appointed to examine the facts, while they are fresh. This examination will be directed towards reaching an amicable settlement of the case, or if this is impossible at least towards clearing the ground as far as possible so that a stated case may be referred to some outside arbitrator or legal authority. The investigation will be undertaken at once and independently of any departmental or police enquiry.


Note 3 The officer receiving a report submitted to him must forward it forthwith to Government through the usual channel with such comments as may be considered necessary. He should also submit a detailed report, after completing such departmental investigations, as may be necessary or expedient on the causes or circumstances which led to the defalcation or loss, the steps taken to prevent its recurrence and disciplinary or any other action proposed as regards the persons responsible.




Any serious loss of immovable property, such as buildings, communications, or other works, caused by fire, flood, cyclone, earthquake or any other material cause, should be reported at once by the Department Officer to the Head of the Department and by the latter to  Government. When a full enquiry as to the cause and extent of the loss has been made, the detailed report should be sent by the Department Officer concerned to the Head of Department, a copy of the report or an abstract thereof being simultaneously forwarded to the Accountant-General.


Note.   All losses of immovable property such as building etc. caused by fire, flood or any other material causes, exceeding Rs. 5,000 in value, should be treated as “Serious” for the purpose. While losses not exceeding Rs. 5,000 in value should continue to be reported to the Head of the Department (and to the police etc., where necessary), they need not be reported to Government or to the Accountant-General, Punjab, whether the cost of restoration is chargeable to maintenance estimates or some other Head of Account. The term “Value” for the purpose, should be interpreted as meaning the Book Value.


Remission of and abandonment of claims to revenue


Heads of Departments should submit annually on the 1st of June to the Accountant-General, statements showing the remissions of revenue, and abandonments of claims to revenue, sanctioned during the preceding year by the competent authorities in exercise of the discretionary powers vested in them otherwise than by law or rule having the force of law. For inclusion in these statements, remissions and abandonments should be classified broadly with reference to the grounds on which they were remissions below Rs. 500 in amount and remission of land revenue should not be included in the statements. A brief explanation of the circumstances leading to the remission should be added in the case of each class. A general list of different kinds of remissions has been given in the Schedule to this annexure.


Note 1.            Where the administrative year does not coincide with the financial year, the figures of the former, if this proves more convenient the Departmental authorities, may be given in the statements.


Note 2.            Although the write of  a loan granted under the Industries Loans Act does not constitute strictly a remission of revenue of abandonments of a claims to revenue it should be included in the statement to be submitted to the Accountant-General.




(Referred to in Annexure B)

List of remission of an abandonments of claims to, revenue to be reported to the Accountant-General



Head of Account

Description of remission

Rule (other than that having the force of law under which given)

Authority responsible for reporting the remission to the Audit Department after it has been sanctioned by competent authority



039-State Excise

To remit or write off irrecoverable balances of excise revenue

Rule 19-16

Excise and Taxation Commissioner



040-Sales Tax

Writing off of irrecoverable sums due under the Punjab General Sales Tax Act, 1944





045-other Taxes and Duties etc.

Writing off irrecoverable sums due under the Punjab Urban Immovable Property Tax Act, 1944





133-Irrigation etc. Water rate remissions

Water rates-remission of money or fodder crop which is cut prior to other money crop damaged by hail-storm etc. or abnormal fall in prices of crops

Financial Commissioner’s letter No. 2602/E, dated 23rd April, 1938 and 636/E, dated 24th February 1938

Divisional Canal Officer, Superintending Engineer and Chief Engineer



133-Irrigation, Navigation, Drainage and Flood Control Project

Remission on account of sudden and abnormal fall in the price of timber or unforeseen mishappenings

Sanctioned by Government (in the Department of Finance) in individual cases

Divisional Canal Officer, Superintending, Engineer, Chief Engineer



065-Other Administration Service-A- Administrative of Justice

Remission of irrecoverable dues on account of court fee in pauper suits

Rule 19-26

Commissioners of Divisions



065-Other Administrative Services

Remission of irrecoverable magisterial fines levied by courts

Rule I of Chapter II of the High Court Rules and Orders, Volume IV

Registrar, High Court

of Judicature




To remit irrecoverable interest due on account of delayed payment of sale proceeds of seed enlisted to the Seed Depot Commission Agents for sale

Rule 19.16

Director of Agriculture







Special Rules for the Treasuries


Rules 3.1 to 3.68 omitted *



Revenue Receipts and their Check



4.1       It is the duty of the Revenue or the Administrative Department concerned, to see that dues of Government are correctly and promptly assessed, collected and paid into the treasury.


            The departmental controlling officers should see that all sums due to Government are regularly and promptly assessed, realised and duly credited into the treasury. They should accordingly arrange to obtain from their subordinates monthly accounts and returns in suitable form claiming credit for so much paid into the treasury and otherwise accounted for and compare them with the statements of treasury credits furnished by the Accountant-General to se that the amount reported as collected has been duly credited to the Consolidated Fund


            If wrong credits thus come to the notice of the controlling officer, he should at once inform the Accountant-General with a view to the correction of the accounts. If any credits are claimed but not found in the accounts, enquiries should be made first of the responsible departmental officer concerned.


Note 1 For this purpose, the Accountant-General will send to the departmental controlling officer an extract from his accounts showing the amounts brought to credit in them each month.


The procedure out-lined in note below rule 2.2 (v) will apply mutatis mutandis to the statement of treasury credits furnished by the Accountant-General.


Note 2.            It is essential that the departmental accounts of revenue should not be compiled from the returns prepared by the treasury. But the Treasury Officer may be required, where necessary, to verify the returns prepared for submission to the departmental controlling authority.


Note 3.            The reconciliation of differences should be carried out as promptly as possible especially in the case of returns for March so that all corrections may be included in accounts of the year concerned.


Note 4.            In order to minimise the differences between the Treasury figures and the departmental figures. It is essential that the challans with which money is remitted to the treasury should bear full and correct accounts classification.


Note 5.            The directions relating to the exhibition of recoveries of expenditure in Government accounts are contained in Chapter 5 of Account Code, Volume I.


Note 6.            For this purpose, the Accountant-General will send to the Departmental Controlling Officer an extract from his accounts showing the amounts brought to credit in them each month. The procedure out-lined in note below rule 2.2(v) will apply mutatis mutandis to the statements of treasury credits furnished by the Accountant-General.





4.2       Writs, warrants and other processes for the collection of revenue under Chapters VI and VII of the Punjab Land Revenues Act of 1887, shall ordinarily be served through the agency of the tehsil chaprasis and the fees recovered will be credited to Government.


Note.   Deputy Commissioners should see that the Tehsil Dakhilas are entered item by item in the prescribed registers and that every item received or paid is at once entered in the cash book or in some authorised register subsidiary there to.


(ii)        FINES


4.3       (a) It is the duty of every court or authority having the power to fine to maintain a register giving particulars of every fine imposed by it an see that the money realised reaches the treasury and adequate precautions are taken against double refunds of fines or refunds of fines not actually paid into the treasury.


            (b) Each Court, Civil or Criminal is required, to submit to the District Judge or to the District Magistrate, as the case may be, on the last working day of each calendar month a statement in the prescribed form showing the demand ; collection and balance of fines levied and written off by it as well as of refunds there from, the statement being made up for the account months of the treasury or sub-treasury with which court deals. The District Judge and the District Magistrate should consolidate these returns into a monthly statement for Officer as soon as possible after the beginning of the month for verification of the amounts shown as remitted into the treasury with the credit appearing in the treasury account. The Treasury Officer should certify to the correctness or otherwise of these amounts. Where there is any discrepancy between a consolidated statement and the treasury account the Treasury Officer may, if necessary, before giving his certificate, request the District Judge or the District Magistrate, as the case may be, to explain the discrepancy. These statements should then be forwarded to the Accountant-General, Punjab, not later than the 7th of each month in order to facilitate check in case refunds are claimed.


Note.   The statement should exhibit the amounts under each head off accounts, e.g., magisterial fines under the Prevention of Cruelty to Animals Act, etc. separately.


            (c) Compensation fines due to an injured party, which are creditable to deposits, and fines, which under the order of the competent authority, are creditable to a municipal or local fund, should be excluded from this return.


            (d) A consolidated statement in the same form should be furnished to the Accountant-General monthly by the Deputy Commissioner giving particulars of fines and penalties, if any, realised by Revenue Officers and remitted by them to the treasury to be credited under the appropriate heads.


            (e) A fine realised in one district on account of another should not be remitted to the district concerned, but should be treated, for the purposes of the fine statement, as if it has been imposed in the court in which it is realised an advice of the recovery sent by the realizing court to the court which inflicted the fine, note of the court to which it relates being also made in the fine statement against the credit. The court which inflicted the fine should, on receiving the intimation, note in its statement the amount of the fine realised and the name of the treasury into which it was paid.


4.4.      Cancelled. (as in the previous Edition).




4.5.      Realization of miscellaneous demands of Government not falling under the ordinary revenue administration will be watched by the Accountant-General. Such are payments on account of contributions from local funds contractors and other towards establishment charges, etc.


Note 1.            All receipts from ferries and cattle ponds which are managed by local bodies first be credited to the respective local funds under the head “Suspense” and at the end of each month when the monthly account is closed they should be credited to the State Revenues.


Note 2.            All rents from temporary cultivation of Government lands in canal colonies should be credited to “Extraordinary Receipts” unless the cost of the land has been debited to the capital account of project, in which case the rent shall be credited to the department concerned and taken to the head “Revenue Receipts” or “Receipts and Recoveries on Capital Account” as the case may be.


Classification of the proceeds of illicit cultivation


Note 3.            (a) In cases in which the trespassers pays rent after mutual compromise with the Collector, the rent paid should be credited to the head “029-Land Revenue-Other Receipts Rent of Lands leased for a single Year or Harvest.”


(b) In case where the offender is punished by a magistrate with a fine or with the confiscation of the crops growing on the land or if the crops have been cut with the assessed value thereof, the amount recovered should be credited to the head “029-Land Revenue-Other receipts-Fines and Forfeitures of Revenue Department”





4.6       The sanction of the competent authority is necessary for the remission of, and abandonment of claims to revenue.


            The procedure for reporting such remissions etc., is laid down in rule 2.34 and Annexure B there under.




4.7       When the audit of the receipts of any department of Government is entrusted to the Comptroller and the Auditor-General under the provisions of paragraph 13 (2) of the Govt. of India (Audit and Accounts) Order, 1936, it will be conducted in accordance with the regulations given below. A list of accounts of receipts, the audit of which has been entrusted by the Punjab Government to the Comptroller and Auditor-General is given in the Annexure to this Chapter.





1.         It is primarily the responsibility of the departmental authorities to see that all revenue, or other debts due to Government, which have to be brought to account are correctly ad promptly, assessed, realised and credited into Consolidated Fund and any investigation by Audit must be so conducted as not to interfere with this executive responsibility. Audit shall, however, have power to examine the correctness of the sums brought to account in respect of receipts of any department in such manner and to such an extend as may be determined by Government in consultation with the Accountant-General.


2.         In conducting the audit of receipts of any Government department the chief aim should be to ascertain that adequate regulations and procedure have been framed to secure an effective check on the assessment collection and proper allocation of revenue; and to see by an adequate detailed check that all such regulations and procedure are being observed. In the audit of receipts, ordinarily, the general is more important that the particular.


3.         In the audit of receipts it would be necessary in the case of a department, which is a receiver of public money; to ascertain what checks are imposed against the commission of irregularities at the various stages of collection and accounting and to suggest any appropriate improvement in the procedure. Audit might, for instance, suggest in a particular case that a test inspection should be carried out by comparing a sample set of receipt counterfoils with the receipts actually in the hands of the tax-payers or other debtors, the results of such an inspection being made available to audit.


            In no case, however, should independent enquiries be made among the tax-payers or the general public. Audit should confine itself to calling upon the executive to furnish necessary information and in cases of difficulty, it should confer with the administrative authorities concerned as to the best means of obtaining the evidence which it requires.


4.         The audit of receipts should be regulated mainly with reference to the statutory provisions or financial rules or orders, which may be applicable to the particular receipts involved. If the test check reveals any defect in such rules or orders the advisability of amendment should be brought to notice.


            It is, however, rarely, if ever, the duty of audit to question an authoritative interpretation of such rules or orders, and in no case may audit review a judicial decision, or a decision given by an administrative authority in a quasi-judicial capacity. This instruction does not, however, debar the Accountant-General from bringing to notice any conclusion deducible from the examination of the results of a number of such decisions.


5.         Where any financial rule or order applicable to the case prescribes the scale or periodicity of recoveries, it will be the duty of audit to see, as far as possible, that there is no deviation without proper authority from such scale or periodicity. When this check cannot be exercised centrally, a test audit may be conducted at local inspections, the aim being to secure that discharge of rule or defect of procedure are not such as to lead to leakage of revenue rather than to see that a particular debt due to Government was not realised at all or on due date.


6.         Ordinarily Audit will see that no amounts due to Government are left outstanding on its books without sufficient reason. Audit will continue carefully to watch such outstanding and suggest to departmental authorities and feasible means for their recovery. Whenever any dues appear to be irrecoverable, orders for their adjustment should be sought. But unless permitted by any rule or order of a competent authority no sums may be credited to Government by debit to a suspense head, credit must follow, and not precede, actual realization.


7.         The procedure prescribed by the Comptroller and Auditor-General for raising and pursuing audit objections in relation to expenditure, including powers of Audit Officers to waive recovery of Government dues under certain conditions shall apply mutatis mutandis in respect of audit objections on any account of receipts.



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