The students, who gathered at Rehari Chowk here, had blocked traffic on the Jammu-Srinagar highway demanding cancelation of the Physics paper prepared by the State Board of School Education and a fresh examination.
Additional DC Arun Manhas said the protesting students pelted stones at police following which the cops resorted to a cane charge and teargas shelling. Two persons -- a class 12 girl and a policeman were injured.
"The situation has been brought under control and students have dispersed," Deputy Commissioner Jammu Simrandeep Singh said.
Authorities have constituted a committee to look into the allegation that an "out of syllabus" paper was prepared by the State Board of School Education (BOSE).
The committe will come out with a report on Tuesday.