Victim Murlidhar Rai, 42, had an argument with three bootleggers Rampratap Singh, Bada Raj and Zahar Singh at his liquor shop, they said.
"As a result of the altercation, Rampratap shot Rai at point blank range killing him on the spot," Dairi police post assistant sub inspector (ASI) Avadesh Pratap Singh said.
According to Singh, the victim was against the trio selling illegal liquor in the village.
"Rai had threatened to lodge a complaint with police against the trio selling illegal liquor in his area," the ASI said.
A search has been launched to arrest the trio and further investigation is on, police said.