A mob ransacked shops in Rohru market in Shimla district after the discovery of a severed cattle head on Thursday, police said.
Protesters from some Hindu groups damaged shops belonging to Muslims in Rohru tehsil after the chopped head was found in a building near Arhal Road, they said.
A large police force was rushed to the spot.
The situation is tense but under control, Shimla Deputy Superintendent of Police Pramod Shukla told PTI.
The police said they pacified the crowd assuring stern action if anyone was found guilty of slaughtering a cow.
A forensics team would determine whether the severed head was that of a calf as alleged, police said.
The police have registered an FIR, including sections in the Indian Penal Code related to attempts to outrage religious feelings and promote enmity between different groups.
The DSP said a case would also be lodged against the protesters who allegedly ransacked the shops.
The police have recorded the statement of a local resident who said a friend had informed him about someone throwing a calf's head at the Shakti Rana building.
Acting Shimla superintendent of police Manmohan was camping in the area to ensure law and order, police said.
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