K Velusamy, who was the Returning Officer of the RK Nagar assembly seat, has been replaced by Praveen P Nair. Tamil Nadu's Chief Electoral Officer had recommended Mr Velusamy's transfer.
Opposition Dravida Munnetra Kazhagam, or DMK, had demanded his transfer for the way in which he disqualified actor Vishal from the race because someone had claimed that the signatures of two of the ten people were forged. The actor has complained that the two had been under pressure from the ruling AIADMK to backtrack.
On Wednesday, Mr Velusamy is accused of first declaring his intention to reject Vishal's nomination papers, then agreeing to accept the papers after he produced an audio tape to prove that the proposers were under threat before eventually rejecting Vishal's nomination.
Later, the official is reported to have explained his decision to accept Vishal's nomination papers to "undue pressure" from the actor.
"I was begging... to accept my nomination papers with folded hands. In this part of the country," the actor later told NDTV.
But the election officer's decision was a big setback for the actor who had hoped to launch his political career with the by-election necessitated due to the death of J Jayalalithaa as Tamil Nadu chief minister in December last year.
That makes the seat a prestige battle for the AIADMK, which has fielded a senior leader, E Madhusudhanan, who has represented RK Nagar before in the state assembly. Also contesting the RK by-election are sidelined AIADMK leader TTV Dhinakaran as an independent candidate and the DMK's Marudhu Ganesh, an RK Nagar local.
Vishal's star power and Telugu roots was being seen as a direct threat to prospects of AIADMK's candidate Madhusudanan, who too, many insiders say, banks on the community's support.