Margao is located 35 km from here.
Collector N.D. Agarwal told reporters that an enquiry has been ordered into the incident.
"Police are in-charge of hoisting the flag and not the collectorate staff. But in any case, we are ordering a probe," Agarwal said.
Hoisting a flag upside down amounts to violation of the Flag Code and can attract imprisonment up to one year.
Earlier, a torn Tricolour was seen hoisted at the same building and triggered controversy.