"The Excise Department officials were trying to shift the liquor shop from highway to Krishna Colony in the town yesterday in accordance with the Supreme Court directives," said police.
The Supreme Court has recently banned sale of liquor within 500 metres of national and state highways.
The residents of Krishna Colony, where the shop was being moved from the nearby highway, opposed this shifting.
Police said confrontation started after locals opposed the opening of a liquor shop in the residential area.
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The situation was later brought under control, said police.
Bareli is about 115-km from state capital Bhopal.
"The burnt and damaged vehicles belong to the liquor contractor and excise department. We have registered a case against the people on the complaint of excise officer Vivek Saxena. The residents have also lodged a complaint against excise department employees and contractor," the police official added.
Earlier on April 3, BJP MLA from Indore-I, Sudarshan Gupta demanded a total liquor ban in Madhya Pradesh and had extended support to the agitation against opening of liquor shops in residential areas.
Reports from Indore said yesterday women from Patthar Mundla area of the city recited bhajans in front of liquor shop demanding its closure while protests were also organised in Pardeshipura area.