C. RAJAGOPALACHARI vs CORPORATION OF MADRAS

The Supreme Court held that the Corporation of Madras could not levy profession tax on pensioners under Section 111(b) of the City Municipal Act, 1919, as a pension does not constitute a profession, trade, or employment. The Court clarified that the tax on pensions is essentially a tax on income, falling under Entry 82 of the Union List, and not within the scope of taxes on professions as defined in the Constitution. Furthermore, the Court ruled that Article 277 does not apply since the tax was a new levy and not a continuation of a prior tax, thus invalidating the Corporation's demand for profession tax from the appellant.