Bhola, a dismissed DSP of Punjab police, told mediapersons outside a court in Mohali that Revenue Minister Bikram Singh Majithia was involved in the case, but police had hushed up the matter.
Although he had named Majithia during interrogations, Punjab police refused to include his name due to the Minister's relations with the Badal family, he said.
Majithia, who is the brother-in-law of Deputy Chief Minister Sukhbir Singh Badal, denied the charge.
Congress hit out at ruling SAD and demanded Majithia's arrest and a CBI probe into the case.
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"MPs and MLAs of ruling SAD are involved in drug trade... Earlier the name of sitting MP Rattan Singh Ajnala too had cropped up, but Chief Minister Parkash Singh Badal gave him a clean chit immediately," Punjab Congress Chief Partap Singh Bajwa said.
Slamming the Punjab police, party spokesman Sukhpal Singh Khaira called it "a private army of the Badal-Majithia clan".
"Incompetence of the Punjab police to arrest the minister for involvement in drug trade, has vindicated allegations by Congress, that Punjab police stands politicised and is working as a private army of Badal-Majithia clan," he said.