The opposition was quick to slam the Mamata Banerjee government for the incident at Tehatta in Nadia district, asking it to rein in the "trigger happy" police.
The state government has ordered a magisterial inquiry into the incident. The agitators also set on fire several police vehicles.
An old dispute over land acquisition for coal mining Nov 6 had triggered a similar clash in Loba village in Birbhum district which left 27 policemen and six villagers injured. While there were allegations of police firing, the state government vehemently denied the claims.
Additional Director General (Law and Order) Surajit Kar Purakayastha said police opened fire in self-defence in Nadia district.
"The police were forced to fire in self-defence after they were attacked by a large crowd. The mob also attacked the SDPO's (sub-divisional police officer) residence where his wife and child stayed," he said.
"The clash has resulted in death of a person while several others including policemen have been injured," added Purakayastha.
Though he refused to confirm whether the victim identified as Ashok Sen (45), died in police firing, Purakayastha said that police first resorted to baton-charge, burst teargas shells and fired rubber bullets and then fired three rounds in self-defence to disperse the "unruly" crowd.
According to police, there was a dispute between two communities over a piece of land and police had gone there to settle the dispute when a mob put up a road blockade and attacked the police team with bombs and stones.
Five persons have been arrested in this connection and processions and meetings have been prohibited to maintain peace in the area.
Slamming the police action, state Congress president Pradip Bhattacharya asked chief minister Banerjee to "discipline" her "trigger happy" police and demanded an impartial probe into the incident.
"The incident brings to fore the intolerant attitude of the government. The situation did not warrant such an extreme police action. Problems cannot be solved by police firing," said Communist Party of India-Marxist leader Surjya Kanta Mishra.