A senior police officer said the police were attacked by the villagers and a few of them were injured by stones and bricks thrown at them.
To bring the situation under control, police resorted to bursting teargas shells and lathicharge, he said.
Villagers on the other hand alleged that the police resorted to unprovoked lathicharge and teargassing.
Power Minister Sobhandeb Chattopadhyay denied any police action.
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There was no reason for the protests as the state government has already halted the project following protests by farmers demanding more compensation for their land.
"I had invited them (farmers and villagers) several times for a meeting but they kept on refusing to meet me. The state government has stopped the project as per their demand. Still they are creating problem in the area. I do not see any logic behind this ... I have doubts about their real intention," Chattopadhyay said.
Secretariat sources said Chief Minister Mamata Banerjee has directed Food Processing and Horticulture Minister Abdur Rezzak Mollah, the local MLA, to rush to the area.
Police were posted at neighbouring Machhi Bhanga, and Tona last night following demonstrations by villagers protesting the setting up of the substation by Power Grid Corporation of India Limited (PGCIL).
District Magistrate PB Salim when contacted said the situation is "totally under control" and the administration was open to discussions with the villagers and farmers.