The MPs alleged the existence of "illegal distilleries" in Patiala, home district of Chief Minister Captain Amarinder Singh and the Lok Sabha constituency of his wife Preneet Kaur.
By Saturday night, the toll has risen sharply with 48 more deaths being reported during the day.
On the evening of July 30, two more persons died in suspicious circumstances in Muchhal, while one person was hospitalised in critical condition and later succumbed at Sri Guru Ramdas Hospital, from where he was referred by Dr. Sarabjit Kaur Hospital, Tangra.
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Police carried out more than 100 raids Saturday to confiscate supplies of the suspected tainted liquor.
The inquiry will look into the facts and circumstances leading to incidents, as well as into any other issues connected or relevant to the incident and the circumstances leading to it, a statement issued by the state government said. "All the guilty, including ministers and ruling party MLAs, be arrested", he demanded, adding that the CM should step down immediately owning the moral responsibility for this "horrendous crime".
Chugh sought a probe by a sitting judge of the high court into the case while rejecting the magisterial inquiry ordered by the state government.
Similar incidents had occurred in 2012 and 2016 in Gurdaspur and Batala, respectively, the CM said. The state government has announced Rs 2 lakh ex gratia for each of the families of the deceased. On Friday, 10 men died in a southern Indian states after consuming sanitizer derived from alcohol, as local liquor shops were closed, police said.
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Sodhi said in the Batala case, neither a FIR was registered nor any action taken against the main accused.
"Such illegal acts are not acceptable", the CM said, asserting that the life of every single Punjabi was precious to him and he will not "let people die due to the greed of a few criminals".
Those who have died in Tarn Taran have been identified as Sahib Singh, Harban Singh, Sukhdev Singh and Dharam Singh.
He also suspended Jandiala (Amritsar) and Tarn Taran DSPs.
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Activists of the SAD's Youth Akali Dal also staged a dharna in Tarn Taran against the government.