Ahmad was being sought by police over that incident before his murder today.
It is understood that Ahmad, who was convicted of the 2002 killing of Mayez Dany, was at the smash repair business during an argument prior to the shootout.
A source with inside knowledge of the rival gangs told News.com.au that a large drug debt was at the centre of the long-running dispute between the two parties - which mainly comprise organised crime gangs.
"Somebody didn't pay protection for their coke run," the source told News.com.au. "Somebody owes 100 grand and that's what this is all about."
The insider described Ahmad as "a peaceable enough kind of guy, just not very smart".
"In fact, they're all dumb c**ts," the source said.
Police have publicly appealed to Ahmad's associates today not to seek revenge over his death.
"Leave it to us to investigate," Bankstown Local Area Commander Detective Superintendant Dave Eardley said.
"There is no need to resort to any activity that would jeopardise themselves or others."
However, those words may have fallen on deaf ears if the reaction from family and friends is anything to go by, with supporters exchanging fears of an all-out war breaking in the wake of his death.
One woman claiming to be a close family friend of Ahmad, Mona M. Jouhador, expressed horror over his death on Facebook before commenting: "War is guns start now (sic)" and "I got goosebumps just thinkin how bad its guns go down now! (sic)."
Izzy Sheikh replied: "Ppl who want to live like gangstas only see this as thr (sic) beginning."
Mrz Saleh warned in the same conversation: "They think its OK its Friday but the killer will be punished and the deceased will enter jannah."
Social media was flooded with tributes to Ahmad, mourning his passing and celebrating his "gangsta" lifestyle.
An exotic dancer employed at a Perth gentleman's club recalled how Ahmad had shown her the ropes when she worked in Auburn in Sydney's southwest.
The woman, posting under the Facebook profile La Tigresa Asi wrote: "Whoever shot Wally Ahmad ain't no real man. It's easy to pull a trigger you f**king p****!
"Wally was an original gangster, a gentleman the old skool who never judged who welcomed me to Auburn in syd. One of the first I was introduced to. Whoever shot him is a P****."
Supt Eardley said police believe the gunman did not act alone and that a burnt-out white Mercedes connected to the crime had been found in Greenacre.
While investigators have not confirmed the identity of the victim, Supt Eardley said police would also be looking at the connection with another shooting at Condell Park earlier this month.
"It's clearly targeted; this is not a random shooting," Supt Eardley said.
"People need to understand and feel safe to go about the streets and their daily lives."
