The cartoon shows Gandhi hiding behind Karnataka Chief Minister Siddaramaiah to protect himself from the giant-sized Modi who trying to catch him.
The works of Acharya, a popular cartoonist, are usually displayed on a fixed hoarding in Kundapura town in Udupi district which is called a 'cartoon corner'.
Reacting to the development, Acharya told reporters he has been drawing cartoons related to all political parties but has courted trouble for the first time.
He said the hoarding was removed the next day itself by municipal authorities on the pretext of clearing billboards in the town.
Municipal authorities removed the hoarding allegedly after instructions of Congress leaders, who described the cartoon as "demeaning and distasteful", he said.
When contacted, the municipal authorities said it was a part of a beautification drive of the town.