While the party gave the minister 24 hours to respond or else it would file a police complaint, Maharashtrawadi Gomantak Party's (MGP) Lavoo Mamledar called the allegation "baseless".
Dhavalikar did not complete his graduation in 1979-80 though he claimed so in his sworn affidavit filed before the state Election Commission, Aam Aadmi Party's Dinesh Vaghela said at a press conference in Panaji.
Dhavalikar is a member of MGP that is one of the two parties supporting the BJP-led government in the state. Vaghela heads the AAP's disciplinary cell.
"The AAP in Goa has reasons to believe that Dhavalikar may not have completed the said course and hence may not possess the degree he has claimed in his sworn affidavit," said Vaghela.
In his sworn affidavit submitted to the local poll authority, Dhavalikar said he obtained a B.Sc. degree from South Goa's Parvatibai Chowgule College (then affiliated to the University of Mumbai) in the academic year 1979-80.
The AAP, which was forced to drop the then law minister Jitender Singh Tomar from the Delhi cabinet following similar accusations about fake degree, said the party has evidence to suggest that Dhavalikar did not complete his graduation.
"We are giving Dhavalikar 24 hours to respond, failing which we will file an FIR with the state police against him for disclosing wrong information on affidavit," Vaghela said.
While Dhavalikar could not be contacted on his mobile phone despite several attempts, party MLA and spokesperson Lavoo Mamledar said: "He (Dhavalikar) completed his graduation along with me. We both studied in the college at the same time."
Mamledar also said that the allegations were baseless. "I do not know for what reason these allegations are being made. The claims are wrong."
Ruling BJP spokesman Wilfred Misquita said it was "up to the Election Commission (of India) to take action against legislators" in case incorrect affidavits were filed.
Thed MGP, which has three legislators, is a coalition partner in the state government along with Goa Vikas Party.