They staged a protest outside Delhi Secretariat and later handed over a memorandum to Chief Minister Arvind Kejriwal.
"We are hurt by the allegations being made by the government in public. Government should treat everyone equally," one of the protesters, J T Tagam, said.
Protesters blamed Kejriwal of being "partial" to the woman IAS officer from North-East.
"First government recommended her name and later objected to her appointment and then accused her of favouring power companies in a public rally before the media. The Chief Minister should publically apologize to her," another protestor said.
People from the community said "attacking" statement by the Delhi government and Kejriwal towards a lady officer was unexpected and uncalled for. Bringing a lady officer from North-East in between the political fight was unacceptable and should have been avoided.
"She is discriminated against in many ways and this is her character assassination. She is being used as a punching bag in a tussle between the Lt. Governor and the Chief Minister. Kejriwal has been making allegations without any proof.
"We stand by Shakuntala Gamlin. By targeting her, he has targeted the entire community. The Chief Minister should conduct an enquiry and if she is found guilty, we are ready to accept the government's decision. She is being made a scapegoat in a political battle," said Taba Doni, president of Arunachal Student Union, Delhi.
Protesters said the government's decision of not appointing her as the chief secretary was illogical and it should have conducted a check on service background of an officer before recommending his/her name for such a senior bureaucratic post.
They said they will also write to President and Prime minister in this regard.
The confrontation over appointment of Gamlin as the acting chief secretary of Delhi had turned into a full-blown war between the ruling AAP and Jung with Kejriwal alleging that the LG was trying to take over the administration.
Despite Kejriwal's strong opposition, Jung had appointed her to the post on Friday.