The GJM claimed one of its activists was also killed in the exchange of fire. The police, however, did not comment on this.
Clashes have erupted between police and supporters of Gorkha Janmukti Morcha (GJM) in Darjeeling's Takvar.
ADG Sharma said the police, which faced "heavy fire power" from the group, retaliated.
He has procured arms from them.
Gurung was now trying to get back to Sikkim, he said. "The morning ambush occurred when police, after having specific information, raided the area to arrest Gurung", he said. State BJP president Dilip Ghosh, while attending a rally in West Midnapore district, said: "We are not supporting anyone in the Hills". The recoveries made by the police following the pre-dawn encounter at Bengal-Sikkim border on Friday and consequent raids across the Hills suggest that the Gurung brigade has stockpiled huge arms and explosives from the Northeast to challenge the state's might. The police recovered 6 AK 47 and some nine mm pistol and around 500 rounds of cartridges from the spot.
Inspector General of law and order, West Bengal police Anuj Sharma said that Gurung and his associates fled during the police operation.
"We don't want the Darjeeling hills to become another Kashmir", he told reporters in Kolkata. Police investigation is yet to ascertain who was behind the incident. "The state government is responsible for the SI's death".
After cases under Unlawful Activities (Prevention) Act were filed against him for his alleged involvement in various bomb blasts in Darjeeling and adjoining areas, Gurung has gone into hiding.
The shutdown was lifted on September 27, hours after Union Home Minister Rajnath Singh appealed to the GJM to call off the over three-month-long strike and invited them for talks to find an amicable solution to the issue.