Led by former state BSP General Secretary Jarnail Nangal, the protestors gheraoed the Mayor's office in Town Hall for about half an hour, squatted and held demonstrations, police said.
They also burnt effigy of local MLA-cum-Chief Parliamentary Secretary, Local Bodies, Som Parkash in protest against the tax to be levied on 'rehris' (moving push cart vendors) and 'pharees' (stationary cart vendors).
They set ablaze effigy of Som Parkash, who was ex-officio member of the Corporation.
They demanded withdrawal of the tax ranging from Rs 1,000 to Rs 3,000 per month.
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Nangal declared that the relay programme of effigy- burning and protest would continue till Friday.
Meanwhile, Mayor Arun Khosla dubbed the protest as "politically motivated".
He said that resolution about levying tax was only adopted and sent to Punjab Local Bodies department.
"It was not yet approved, what to speak of being implemented", he said. He said that it could still be reviewed.
"Others 'rehris' will be charged only Rs 1,000 monthly", he said.
"Corporation will provide all civic amenities to vendors in return", he said.
Khosla alleged that some frustrated political elements were misleading 'rehri' vendors and putting public to inconvenience with unwarranted protests.