Judgement

SHELAT, J. : This appeal by special leave is directed against the judgment and order of the High Court of Madhya Pradesh in Second Appeal No. 378 of 196l.

2. The respondents as trustees of, a charitable trust are the owners of certain houses situate in Indore City. Prior to January 26, 1954 the Indore Municipality was governed by the Indore City Municipal Act, 4 of 1909. By virtue of the power conferred on it by that Act the Municipa1ity used to levy and collect house tax at the rate 7 per cent of the gross annual letting value of these houses and the trustees duty paid such tax. After the formation of the State of Madhya Bharat, the legislature of that State passed the Madhya Bharat Municipalities Act, 1954 which came into force on January 26, 1954. The 1954 Act repealed amongst other Acts the Indore City Municipal Act, 1909. The Indore Municipality however purported to levy the house tax on the basis of the gross annual letting value at the rate of 7 per cent of such value for the financial years 1953-54 and 1904-55. This was objected to by the respondents on the ground that under the 1954 Act the tax could be assessed on the basis of gross annual letting value less 10 pe