Police sources say the attack on C Biju was led by a group of men who came in a Toyota Innova; the attackers have not been identified yet.
When asked if the murder was a case of political retaliatory killing, senior police officials said they are trying to track down an eyewitness to get details of the case.
The police security in and around the Payyannur area in Kannur has been tightened to avoid any further escalation.
The killing has drawn a strong reaction from Kerala BJP chief Kummanam Rajasekharan, who said Kannur should be declared a "disturbed area" and the Armed Forces (Special Powers) Act or AFSPA should be imposed in the district.
"CPI(M) workers are unleashing violence against their political rivals and even the chief minister has failed to control them," alleged Mr Rajasekharan.
It was in February this year that an all-party meeting of political leaders in Kannur took a decision to end political violence and to ensure cadre peace in Kannur. The district is infamous for the political murders between BJP and CPM, with a history running beyond three decades.
With inputs from PTI