Deputy Inspector General (Ferozepur Range) Hardial Singh Mann, in an official release, said the murder was the handiwork of some gangsters.
Earlier, the family had refused to cremate the body unless the accused were arrested, but then agreed to conduct the last rites after an assurance was given by the Tarn Taran district administration.
Sandhu's wife Jagdish Kaur was adamant that the family will not perform the last rites until the culprits were arrested and also accused the government of withdrawing his security cover.
Family refuses to conduct last rites of Shaurya Chakra awardee Balwinder Singh Sandhu until his killers are arrested
Balwinder Singh Sandhu fought against terrorism, facing scores of terror attacks during the height of Khalistani militancy.
Sandhu had fought against terrorism in the state for years, facing at least 16 terror attacks during the height of Khalistani militancy.