Summarize the following court judgment. Appeal No. 580 of 1962. Appeal from the judgment and decree dated May 1	 1961	 of the Madras High Court in Writ Petition No. 975 of 1959. R.M. Seshadri. and R. Gopalakrishnan	 for the appellant. R. Ganapathy lyer	 for respondent No. 1. A. Ranganadham Chetty and A. V. Rangam	 for respondent No. 2. March 3	 1964. The Judgment of the Court was delivered by AYYANGAR	 J. This appeal comes before us by virtue of a certificate of fitness granted by the High Court of Madras under article 133(1)(c) of the Constitution against its judgment dismissing a petition filed by the appellant under article 226 of the Constitution seeking a writ of prohibition against the Corporation of Madras challenging the constitutional validity. of a notice requiring the appellant to pay profession tax. The appellant held office as the last Governor General of India. Under section 3 of Central Act XXX of 1951 the appellant is entitled to a pension of Rs. 15	000/ per annum and has been drawing this sum residing in the city of Madras. The Corporation of Madras the first respondent before us demanded profession tax from the appellant under section 111(1)(b) of the City Municipal Act	 1919 hereinafter called the Act for the year 1958 1959 on the ground of the appellant 's residence within the city for the period therein specified and his drawing the pension to which he was entitled. The appellant addressed a communication to the Corporation asserting that this demand was illegal as the Corporation was empowered by the relevant constitutional provisions merely to levy a tax "on a profession	 965 trade	 calling or employment" and that as he as a pensioner did not fall under any of these classes	 the said demand was illegal. The authorities of the Corporation	 however	 insisted on compliance with the demand on the ground that under the express terms of the Act persons in receipt of pensions were also liable to the tax. The appellant thereupon filed a writ petition for the relief already set out	 and as the validity of the State Act was impugned impleaded the State of Madras also as a respondent. It would be seen from the foregoing that the question for consideration is whether the 1st respondent Corporation is entitled to levy a tax on pensioners in respect of the pensions received by them. In order to appreciate the submissions made to us by learned Counsel for the appellant it would be necessary to set out the history of the legislation in relation to profession tax and the impugned tax on persons in receipt of pensions applicable to the City of Madras because it is on a construction of these provisions that the learned Judges of the High Court have upheld the validity of the levy and dismissed the appellant 's writ petition. For this purpose it is not necessary to travel to any period anterior to the enactment of the Madras City Municipal Act (Madras Act IV of 1919) which with certain amendments to be referred to presently is still in force. The Act received the assent of the Governor on March 26	 1919	 of the Governor General in June	 1919 and came into force on publication in the Gazette which was in the same month. Having been enacted while the powers of the Local Legislatures were governed by the Government of India Act	 1915	 the constitutional validity of the legislation is not open to any challenge. Section 111(1 of this enactment ran "Every person not liable for the companies ' tax. who	 within the city and for the period prescribed in Sec. 113	 exercises a profession	 art	 trade or calling or holds an appointment	 public or private	 bringing him within one or more of the classes of persons specified in the taxation rules in Schedule IV shall pay by way of licence fee and in addition to any other licence fee 966 that may be leviable under this Act a tax as determined under the said rules but in no case exceeding rupees five hundred in the half year and such tax may be described as the profession tax. " The Section had two explanations of which the second is material and this reads: Explanation 2 "A person in receipt of a pension paid from any source shall be deemed to be a person holding an appointment within the meaning of this section. ' The next change in the relevant provision was effected by Madras City Municipal Amendment Act	 193	6 (Madras Act X of 1936) which came into force on 14th April 1936. By this amendment a new section section III was substituted 	for the old one just set out	 and under this Explanation (2) was deleted and the substituted provision ran : "III(1). If the Council by a resolution determines that a profession tax shall be levied	 every person not liable to the tax	 on companies	 who after the date specified in the notice published under sub sec. (2) of Sec. 98 A in any half year (a) exercises a profession 	 art or calling or transacts business or holds any appointment	 public or private (i) within the city for not less than sixty days in the aggregate	 or (ii) outside the city but who resides in the city for not less than sixty days in the aggregate; or (b) resides in the city for not less than sixty days in the aggregate and is in receipt of any pension or income from investments	 shall pay in addition to any licence fee that may 967 be leviable under this Act	 a half yearly tax assessed in accordance with the rules in Schedule IV in no case exceeding rupees five	 hundred. " Along with this was added a new section section 98 A which ran : Sec. 98 A(1): "Before the council passes any resolution imposing a tax or duty for the first time it shall direct the Commissioner to publish a notice in the Fort St. George Gazette and in the local papers of its intention and fix a reasonable period not being less than one month from the date of publication of such notice in the Fort St. George Gazette for submission of objections. The Council may	 after considering the objections	 if any	 received within the period specified	 determine by resolution to levy the tax or duty. Such resolution shall specify the rate at which	 the date from which and the period of levy	 if any	 for which such tax or duty shall be levied. When the Council shall have determined to levy any tax or duty for the first time or at a new rate the Commissioner shall forthwith publish a notice in the manner laid down in sub section (1) specifying the date from which the rate at which and the period of levy	 if any	 for which such tax or duty shall be levied. " At this stage it is necessary to refer to Schedule IV in accordance with which the tax has to be assessed under the terms of section 111(1). In the Act as enacted in 1919 the relevant rule in Schedule IV divided persons assessed to profession tax etc. into 8 classes	 based upon the amount of 	monthly salary received in the case of those holding appointments	 and income derived in the case of those in trade	 art calling etc. Each of these classes was again sub divided 	into two the first sub class comprising "Persons holding appointments upon a monthly salary" and the other of 968 "persons exercising any profession	 trade	 art	 calling or transacting business". It would be seen that having regard to Explanation 2 to section 111	 as it stood in 1919	 before its amendment by Act X of 1936 by reason of the provision which enacted that "persons in receipt of pension" were deemed to be "persons holding appointments" when the rule in Schedule IV referred to "persons holding appointments" it included by the statutory fiction pensioners who on the basis of the amount of pension which they derived were classified as "persons holding appointments" under the various classes. But when this Explanation to section Ill was deleted by the Amending Act X of 1936 and when the new section 111	(1)(b) referred to the "half yearly tax assessed in accordance with rules in Schedule IV	 it was urged that there could not have been an assessment of persons in receipt of pension unless they could be comprehended as within the category of persons holding appointments	 or of persons exercising any profession	 trade	 or art or calling"	as these were the only classes relevant to the present purpose who were within the scope of the rules under Schedule IV. We shall refer to the submission based on this feature as regards the terminology employed in Schedule IV in its proper place. The Corporation of Madras availed itself of the provisions of section 98 A and after the issue of the notices prescribed by it passed a resolution at a meeting held on March 31	 1937 to levy inter alia "profession tax" for the year 1937 38 at the rates which were specified in the resolution. As regards "profession tax"	 the resolution read : "Resolved that the profession tax in respect of clauses 1	 2	 3	 4	 5 and 6 be fixed at the maximum rate and 25 per cent over and above the minimum rates prescribed in Schedule IV of the Act in respect of clauses 7	 8 and 9." This resolution further specified that the tax at the rates therein set out which were higher 'than what prevailed before	 were to have effect from April 1	 1937. Notwith standing the apparent inapplicability of the rules in Schedule IV to the levy of profession tax on pensioners	 the Corporation continued to assess pensioners to the said tax and 969 collected the same. The lacuna in the enactment was Apparently noticed in 1942 when by a notification in the Official gazette the Schedule was amended in exercise of the powers conferred on Government by section 347(3) of the Act. Under the amendment instead of the words "Persons holding any appointment or persons exercising profession	 trade or calling etc. "the classes 'Were divided	 on the basis of "the half yearly income received by the individual specified in section 111(1)". This amendment to the Schedule was directed to come into force from April 1	 1942. The relevant terms of Schedule IV have continued up to date in the same from as amended in 1942 only the rate of tax has been progressively increased; first in 1950	 then in 1958 and again in 1961	 but in the view we take of the principal contention raised by the appellant it is not necessary to set out or deal with these increases. Pausing here the ground upon which the demand for "profession tax" made by the Corporation was impugned may be briefly stated. The power of the Corporation to levy the tax is dependent on the subject of the tax being within State legislative power under the Constitution. The relevant 'entry in the Legislative Lists conferring taxing power on the State under which alone	 if possible	 the present levy could be supported was item 60 in the State List in Schedule VII of the Constitution reading: "Taxes on profession	 trades	 callings and ' employments. " Being a "pensioner" cannot be a "profession	 trade	 business or calling"	 nor could a tax on a person because he is in receipt of a pension be said to be a tax on "employments". The tax therefore under the last portion of section 111(1)(b) reading Profession tax on persons "in receipt of any pension or income from investments" is nothing but a tax on income falling within Entry 82 of the Union list. If	 therefore	 the Corporation could not justify the tax as being within the State legislative power the only manner in which it could be done would be by reference to article 277 of the Constitution by which "taxes	 duties	 etc." ' which "were being lawfully levied" prior to the commencement of the 970 Constitution were permitted to be levied "notwithstanding that the tax was in the Union List" and "to be applied to the same purposes" as before. Unless therefore the Corporation could make out that the tax now impugned was being lawfully levied from before the Constitution the levy would be illegal and besides there was the complication introduced by the enhancement of the rates of tax which	 as stated earlier	 were effected in April	 1950	 April 1958 and in 1961. Leaving aside for the moment the question of the effect of the enhancement of the rate	 we have to see whether it has been established that the duty was lawfully levied by the Corporation prior to the Constitution. The answer to the question whether it was "lawfully levied" prior to 26th January	 1950 when the Constitution came into force would depend upon the effect of certain provisions of the Government of India Act	 1935. Under that enactment	 as under the Constitution	 the State legislative power as regards taxes of the nature now in controversy was couched in terms identical with that employed in entry 60 of the State List in the Constitution. Entry 46 in the Provincial Legislative List under the Government of India Act	 1935 ran: "Taxes on profession	 trades	 callings and employments" : and "taxes on income" fell within the exclusive Federal 'Legislative power under Entry 54 of List I. By the Indo Burma Miscellaneous Provisions Act	 1940 the Parliament of the U.K. enacted section 142 A to whose terms we shall advert later and by the same enactment entry 46 was amended and the words : "Subject	 however	 to the provisions of section 142 A" were added at the end of entry 46. Here	 again	 it would be seen that if the right of the Corporation to levy profession tax on the pension received by a pensioner had to rest on the legislative entries it would fail because it was 	outside the legislative power of the Province under the Lists read with section 100 of that Act corresponding	 to article 246 of the Constitution. The validity of the levy during the period when the Government of India Act was in force i.e. between 1st April	 1937 and 25th January	 1950 was dependent on 971 its falling within the saving contained in section 143 (2) of the Government of India Act which ran : "Any taxes	 duties	 cesses or fees which	 immediately before the commencement of Part III of this Act	 were being lawfully levied by any Provincial Government	 municipality or other local authority or body for the purposes of the Province	 municipality	 district or other local area under a law in force on the first day of January	 nineteen hundred and thirty five	 may	 notwithstanding that those taxes	 duties	 cesses or fees are mentioned in the Federal Legislative List	 continue to be levied and to be applied to the same purposes until provision to the contrary is made by the Federal Legislature." No doubt the Amending Act was not in force on 1st January	 1935 having been passed in April 1936	 but this would not take it out of section 143 (2) because para.3 of the Indo Burma (Transitory Provisions) Order	 1937	 being an Order in Council by His Majesty in Council authorised by section 310 of the Government of India Act	 provided : "Para 3(1): For a period of two years from the commencement of Part III of the Indian Act	 the provisions of subsection (2) of section one hundred and forty three of that Act (which authorises the continuance until provision to the contrary is made by the Federal Legislature	 of certain provincial taxes falling within the Federal List) shall have effect as if the reference to the first of January nineteen hundred and thirty five were a reference to the commencement of the said Part Ill." It would follow	 therefore	 that for the present demand to be sustained as valid it would be sufficient if it was shown that the tax was lawfully levied immediately prior to the commencement of Part III of the Government of India Act	 1935	 i.e.	 on 31st March	 1937. The learned Judges of the High Court held that this condition was satisfied and on this basis they have dismissed the appellant 's petition. 972 Learned Counsel for the appellant submitted four points in support of the appeal : (1) That the amending Act X of 1936 Was not validly passed by reason of its contravening the Devolution Rules framed under section 45 A of the Government of India Act	 1919 by which Local Governments were given legislative power inter alia to levy taxes on professions	 trades	 etc. but that the present tax which is really a "tax on income" was a Central subject outside the competence of the Local Legislature	 (2) Even assuming that Act X of 1936 was valid	 the tax which was permitted to be levied under it was	 having regard to the terms of section 111 ( 1 ) a new tax which was levied for the first time by the resolution of the Corporation only on and from April 1	 1937 and	 therefore	 the present tax was not in operation prior to the commencement of Part III of the Government of India Act	 1935 and not therefore saved by section 143(2) of that Act	 (3) Besides	 between 1st April	 1937 to 1st April	 1942 it was not lawfully levied by reason of the lacuna created by the words of the rules in Schedule IV being inapplicable to the levy of a tax on pensioners	 (4) The increase. in the rates from 1937 onwards could not be justified even under section 143 (2) or article 277 and by reason of these changes in rates the tax became virtually a new tax and could not continue to be lawfully levied to any extent after the increases. The first point need not detain us long. Prima facie it would seem that there being no rigid distribution of legis lative power between the Central and Local Governments under the Government of India Act	 1919 any infraction of the rules made under the Devolution Rules framed under section 45 A would be validated by section 80 A(3) and section 84(2) of the Government of India Act	 1919. The learned Judges of the High Court before whom this contention was urged rejected it	 and the learned counsel submitted that the decision on this point was not correct. But in the view that we took of the other submissions made to us	 we did not hear learned counsel fully on this point and therefore do not propose to express any final opinion on the tenability of the argument on this head. 973 As preliminary to the consideration of the second point it would be necessary to advert to one feature of the change effected by the Amending Act of 1936 to the tax levy. Under section 111	 as it originally stood	 the liability to pay the tax	 i.e.	 the charge for the tax	 was imposed by virtue of the statute itself	 on persons who for the period prescribed "exercised a profession or trade or calling or held an appointment"	 persons in receipt of pensions being deemed to be persons holding appointments. This structure as regards the imposition of liability was altered by the Amending Act. Under the provision	 as recast	 before a liability to pay the tax could arise the Council had to determine by a resolution that profession tax shall be levied and it was only that resolution which brought the charge into operation. Thus	 the resolution of the Council was substi tuted for the statute itself as the mode by which the charge was to be imposed. There was also a second change that was introduced by rendering residence for six months within the city	 besides the receipt of pension in the city	 a necessary ingredient of the chargeability of the "profession tax" on pensioners. The effect of these two changes now calls for consideration. On the amendment of section Ill by the Act of 1935 coming into force in April 1936	 the statutory imposition of the charge to tax laid on persons in receipt of pensions within the city of Madras ceased	 and the liability to tax as regards the period after that date was dependent on the passing of a resolution by the Council in terms of the amended section III( 1 ) of the Act. In this con nection it has to be pointed out that though recourse to the procedure as respects previous publication etc. prescribed by section 98 A was necessary only in the case of taxes newly levied	 and might have been adopted in the present case because of the enhancement of the rates	 still	 a resolution 	of the Council was necessary to impose the tax as without it	 no liability to profession tax would arise. The charge to tax was imposed	 as stated earlier by the resolution of the Council which was to have effect from April 1	 1937. In other words by reason of the repeal of the original section III	 the statutory charge to tax on pensions ceased in April 1936. A charge was imposed again under the resolution of the Council effective from 1st April	 1937	 so that 974 between April 1936 to 31st March	 1937	 no charge was imposed by virtue of any "law". Learned Counsel for the Appellant submits that this is in effect a new levy a levy of a tax which was not legally in existence on 31st March	 1937	 and if this levy could not be supported as being sanctioned by section 143(2) of the Government of India Act	 1935	 it is common ground that the lawfulness of the levy cannot be sustained. We consider this submission well founded. If the statutory charge to profession tax imposed on pensioners by the Act of 1919	 was lifted by the Act of 1936	 and the tax again came into operation only on 1st April	 1937	 it would follow that there was no "levy of the tax" "immediately before" the commencement of Part III of the Government of India Act	 1935	 so as to bring it within the saving in section 143(2) of that Act. Besides	 the two circumstances. viz. : that residence within the city for a specified period was made a condition of the liability to the tax	 as well as the increase in the rates would both serve to emphasise that the levy was a new one	 with a different texture and not a continuance of the tax which was levied just prior to the 1st April	 1937. Learned Counsel for the respondents the Corporation of Madras and the State have urged that it was in substance the old levy. We are unable to agree. The mere fact that prior to 1st April	 1937 the Corporation had under Act X of 1936 the power to bring the tax into force by a resolution does not on a proper construction of section 143(2) bring it within the range of those taxes or duties which "were being lawfully levied" prior to the commencement of Part III of the Government of India Act which alone are permitted to be continued to be levied notwithstanding that these duties were in the Federal Legislative List. This question has been considered by us in great detail in The Town Municipal Committee	 Amravati vs Ram Chandra Vasudeo Chimote and Another	 etc.(1) in which judgment has been pronounced today and it is unnecessary to re examine the same. The mere existence of a power to bring a tax into operation	 cannot	 as pointed out	 be equated with "a tax (1) ; 975 which was being lawfully levied" before Part III of the Government of India Act	 1935. The 3rd submission of learned Counsel for the appellant is also well founded. The conclusion we have reached as to the effect of the amendment to section 111 by Act X of 1936	 and of the tax being imposed by resolution of the Council from 1st April	 1937 not being a tax which was being lawfully levied immediately prior to 1st April	 1942	 is reinforced by reference to the rules in Schedule IV which; remained unamended till 1942. Under section 111(1) as amended	 the tax could be levied only in accordance with the rules in Schedule IV and as those rules did not make a provision for the levy of a tax on pensioners	 it would follow that the tax "was not being lawfully levied" on them. As already pointed out	 the relevant rules in that Schedule were framed at a time when Explanation 2 formed part of section III and "pensioners" were deemed to "hold appointments". With the deletion of the Explanation	 the fiction created by the original Madras Act IV of 1919 ceased and thereafter if the rules in Schedule IV had to be applied to them these had to be suitably modified. This	 as we have pointed out earlier	 was done only from April 1	 1942	 so that in reality taxes on pensioners were "lawfully" levied upto 1936 and then after a break from April 1	 1942	 we use the word "lawfully" on the assumption that this could ' have been legally done under the Government of India Act	 1935	 a point already discussed. The learned Judges of the High Court have rejected the argument addressed to them under this head by reference to section 18 of the Madras General Clause Act corresponding to section 24 of the General Clauses Act (Central Act X of 1897). With great respect to the learned Judges we do not see how this provision affords any assistance in the matter. The Schedule and the rules continued without repeal or amendment when the new section III (1) was substituted in 1936	 and when this section made a reference to the rules in Schedule IV it could only be a reference to the rules in the Schedule IV which stood ' unaltered. If the phraseology employed in the Schedule was inappropriate to a class which fell within section 111(1)	 the	 only effect would be that the tax could not be levied	 because 976 of the defect in the law imposing the tax	 but such a situation is not remedied by reference to the provision in the General Clauses Act on which the learned Judges have relied. If	 therefore	 the	 tax was one not lawfully levied just prior to April 1	 1937 and was one brought in after the Government of India Act	 1935 came into force	 and really only from April 1	 1942 assuming this to be lawful it is obvious that the validity of this tax could not be sustained as a continuation of a lawful pre existing levy under section 143 (2). In this view it is not necessary to consider the last of the points urged by learned Counsel and examine whether in case of an increase of rate	 the entire tax would become a new tax and so unconstitutional or whether it is only the increase in the rate that would become unenforceable. Learned Counsel for the respondent Corporation submitted that the tax could not be deemed to be a tax on income	 as was suggested by the appellant	 but was really a tax on employment because it was in consideration of past services during employment that pension was payable. This argument was admittedly not urged before the learned Judges of the High Court and is obviously untenable. The taxes specified in item 60 are taxes on the carrying on of a profession	 trade	 etc. and would	 therefore	 apply only to a case of present employment. The mere fact that a person has previously been in a profession or carried on a trade	 etc. cannot justify a tax under this Entry. The tax on the receipt of pension or on the income from investments which is referred to in the last part of section 1 1 1 ( 1 ) is in truth and substance a tax on income and in fact the argument before the High Court proceeded on this basis	 so have the learned Judges. At the time the tax is levied the pensioner is in no employment but is only in receipt of income though it might be for past services	 in an employment. He next submitted that Act X of 1936 which had been enacted prior to the Government of India Act	 1935 was continued as an existing law by section 292 of the Government of India Act and as there was nothing in the Government of India Act against its continuance it would have effect 977 even if the terms of section 143 (2) were not satisfied by the present levy. The learned Judges of the High Court accepted this submission. In our opinion	 they were in order. The question of the correlation between article 372 corresponding to section 292 of the Government of India Act and article 277 corresponding to section 143(2) of the Government of India Act was considered by this Court in South India Corporation (P) Ltd. vs The Secretary	 Board of Revenue	 Trivandrum(1) and this Court said: "It is settled law that a special provision should be given effect to the extent of its scope	 leaving the general provision to control cases where the special provision does not apply. The earlier discussion makes it abundantly clear that the Constitution gives a separate treatment to the subject of finances	 and article 277 saves the existing taxes etc. levied by States	 if the conditions mentioned therein are complied with. While article 372 saves all pre Constitution valid laws	 article 277 is confined only to taxes	 duties	 cesses or fees lawfully levied immediately before the Constitution. Therefore	 article 372 cannot be construed in such a way as to enlarge the scope of the saving of taxes	 duties	 cesses or fees. To state it differently	 article 372 must be read subject to article 277. " Learned Counsel next drew our attention to section 142 A(1) of the Government of India Act	 1935 and faintly suggested that it might afford him some assistance. This provision	 again	 was not adverted to before the learned Judges of the High Court and for a proper reason. section 142 A(1) which corresponds to article 276(1) of the Constitution enacted : "Notwithstanding anything in section one hundred of this Act	 no Provincial law relating to taxes for the benefit of a Province or of a municipality	 district board	 local board or other local authority therein in respect of professions	 (1) ; 134 159 S.C. 62 978 trades	 callings or employments shall be invalid on the ground that it relates to a tax on income. " This section would assist the respondent only if tax imposed were one on a profession	 trade	 calling	 or employment and in that event the section provides that such a tax shall not be deemed to be a tax on income	 but where the tax imposed is one not on a profession	 etc. at all	 it does not mean that the State might levy a tax on income and call it "profession tax". This is sufficient to dispose of a similar argument as regards the scope of the amended Entry 46 in the Provincial Legislature List (List II) to which we have adverted earlier. The appeal accordingly succeeds and the appellant is held entitled to the relief prayed by him in the	 filed in the High Court	 viz.	 a writ of Prohibition against the respondent Corporation from enforcing the demand. The appellant will be entitled to his costs from the respond ents here and in the High Court. Appeal allowed.

The appellant held office as the last Governor General of India. He has been drawing Rs. 15	000/ per annum as pension while residing in the city of Madras. The Corporation of Madras demanded profession tax from him under section 111(i)(b) of the City Municipal Act	 1919 for the year 1958 59 on the ground of his residence being within Madras city and his drawing the pension to which he was entitled. The appellant addressed a communication to the Corporation asserting that this demand was illegal as the Corporation was empowered by the relevant constitutional provisions merely to levy a tax "on a profession	 trade calling or employment" and that as he as a pensioner did not fall under any of these classes	 the said demand was illegal. The Corporation did not accept the contention of the appellant and therefore	 the appellant filed a writ petition under article 226 of the Constitution before the High Court. The High Court dismissed the writ petition of the appellant. The High Court granted a certificate under Art.133(1)(c ) of the Constitution to the appellant to file on appeal to the Supreme Court. Hence the appeal. The question before the Supreme Court was whetherthe Corporation was entitled to levy a tax on pensioners in respect of thepensions received by them in Madras City. Held:(1) that the power of the Corporation to levy the tax is dependent on the subject of the tax being within the State Legislative power under the Constitution. The present levy comes within the purview of item 60 in the State list in Schedule VIII of the Constitution	 which reads as follows: "Taxes on profession	 trades	 callings and employments. " Being a "pensioner" cannot be a "profession	 trade	 business or calling"	 nor could a tax on a person because he is in receipt of a pension be said to be a tax on 'employments". The tax	 therefore	 under the last portion of sec. 111(1)(b) reading profession tax on persons "in receipt of any pension or income from investments" is nothing but a tax on income falling within Entry 82 of the Union List. 963 The taxes specified in item 60 are taxes on the carrying on of a profession	 trade etc.	 and would	 therefore	 apply only to a case of present C. ' employment. The mere fact that a person has previously been in a profession or carried on trade etc. cannot justify a tax under this entry. The tax on the receipt of pension or on the income from investments which is referred to in the last part of sec. 111(1) is in truth and substance a taxon income. At the time the tax is levied the appellant pen sioner is inno employment but is only in receipt of income. (ii) The present levy of tax cannot be saved by article 277 of the Constitution because the tax was a new levy and not a continuance of a tax which had been levied just prior to April 1	 1937. On the facts of this case it was held that if the statutory charge to profession tax imposed on pensioners by the Act of 1919	 was lifted by the Act of 1936	 and the tax again came into operation only on April 1	 1937	 it would follow that there was no "levy of the tax ' immediately before the commencement of Part III of the Government of India Act. so as to bring it within the saving in section 143(2) of that Act. Besides	 the two circumstances	 viz.	 that residence within the city for a specified period was made a condition of the liability to the tax	 as well as the increase in the rates would both serve to emphasise that the levy was a new one	 with a different texture and not a continuation of the tax which was leved just prior to April 1	 1937. (iii)The mere fact that prior to 1st April	 1937 the Corporation had under Act of 1936 the power to bring the tax into force by a resolution does not on a proper construction of section 143(2) bring it within the range of those taxes or duties which "were being lawfully levied" prior to the commencement of Part III of the Government of India Act 1935	 which alone are permitted to be continued to be levied notwithstanding that these duties were in the Federal Legislative List. The mere existence of a power to bring a tax into operation	 cannot be equated with "a tax which was being lawfully levied" before Part III of the Government of India Act	 1935. The High Court erred in holding that section 292 of the Government of India Act applies to this case. The Town Municipal Committee	 Amravati vs Ramchandra Vasudeo Chimote	 ; 	 South India Corporation (P) Ltd. V. The Secretary	 Board of Revenue	 Trivandrum	 A.I.R. 	 relied on. (iv)Under section 111(1) as amended	 the tax could be levied only in accordance with the rules in Schedule IV and as those rules did not make a provision for the levy of a tax on pensioners	 it would follow that the tax "was not being lawfully levied" on them. The High Court erred in holding that such defect would be removed by section 18 of the Madras General Clauses Act. (v)S. 142 A(1) of the Government of India Act	 1935 would assist the respondent 's case only if tax imposed were on a profession	 trade	 calling or employment. In the present case	 the tax is being imposed 664 on an income of a pensioner and so this provision has no application. It is not the intention of Parliament that State might levy a tax on income and call it "profession" tax.