Violating the election model code of conduct, Dhushmanta Das was distributing the fake notes in the early hours when he was apprehended, police said.
While he was being taken to Jagiroad police station, his supporters clashed with the security forces, prompting police to lathicharge and fire seven rounds in the air to disperse them, they said.
No injury was reported.
The situation was brought under control and police recovered five fake currencies with a face value of Rs 1,000 and ten fake notes of Rs 500 denomination.
A decision is yet to be taken on Das's poll fate.
Morigaon: An independent candidate for the ongoing Panchayat polls in Assam was caught red handed when he was distributing fake currency notes among the voters in south Dharamtul gaon panchayat constituency on Sunday.
First Published: Sunday, February 03, 2013, 16:08