Here are 10 points in this big story:
The Delhi Chief Minister was summoned by the ED - which is probing the money laundering angle in the case - on Monday, hours after the Supreme Court had rejected the bail petition of his former deputy, Manish Sisodia, who is the prime accused in the case. The judges had said a money trail of Rs 338 crore has been tentatively established.
Mr Kejriwal had been questioned by the Central Bureau of Investigation in the case in April and this is the first time he has been summoned by the ED.
After the summons was issued, senior AAP leader and Delhi minister Saurabh Bharadwaj had said, "The Central government has only one objective - to destroy the Aam Aadmi Party at any cost. For this, they are leaving no stone unturned, including creating a fake case. The idea is to send Arvind Kejriwal to jail and destroy the Aam Aadmi Party."
In an exclusive interview with NDTV on Tuesday, Mr Bharadwaj had claimed that Mr Kejriwal would be arrested by the central agency. When he was asked whether the party had a Plan B ready if that happened, he said, "As of now, I don't know and I don't think there's any discussion about it. Kejriwal is our leader and we will work under his direction"
Claims about the chief minister's probable arrest have also been made by Delhi Minister Atishi, who said he would be taken into custody after the questioning. This would happen, she alleged, not because the agency had any evidence against him, but because he had spoken out against the BJP.
AAP is part of the Indian National Developmental Inclusive Alliance (INDIA) and several members of the bloc have condemned the summons and said it is further proof of their stand that the central agencies are being misused by the BJP-led government.
Speaking on the issue on Wednesday, West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee said "Before next year's elections, they (the BJP) are trying to gag the voice of all opposition parties. They are planning to arrest all opposition leaders before polls so they can vote for themselves in an empty country... they are hatching a conspiracy."
If arrested, Mr Kejriwal will be the third senior leader from the AAP to be taken into custody in the liquor policy case. Mr Sisodia was arrested in February and the party's Rajya Sabha MP Sanjay Singh met the same fate last month. Delhi Minister Satyendar Jain had also been arrested in a money laundering case last year.
Dismissing the AAP's claims, the BJP has said that the AAP was finishing itself off with its "scams, corruption and misdeeds". It also claimed that a "massive scam" like the liquor policy case could not have happened without Mr Kejriwal's approval. The party has said the central agencies are acting independently and the legal process is being followed.
The CBI case hinges on the involvement of liquor companies in framing the excise policy, which would have brought them a 12 per cent profit. It has claimed that a liquor lobby had paid kickbacks. The Enforcement Directorate is probing the alleged laundering of the kickbacks.
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