R. K. ABICHANDANI, J. ( 1 ) THE petitioners have filed this petition praying for arrears (if salary for the months of May and June 1980 and for a further direction on the respondentnagar Panchayat to continue to pay their salaries regularly before 7th of every month. ( 2 ) ). The respondent No. 1 is the Association of the employees of the respondent-Panchayat and the petitioners No. 2 and 3 have also joined in their individual capacity as employees of the Panchayat. The list of the employees of the Panchayat who were the members of the. Association is given at Annexure A to the petition. The case of the petitioners it that Budget Estimate for the year 1980 81 in Form No. 1 was submitted by the respondent Nagar Panchayat and sanctioned by the District Panchayat. In the said Budget Estimate salary of the employee was specifically shown under the head General Establishment Medical and Health. Schedule for the salary of the employees of the Panchayat for the year 1980-81 included the estimate of Rs. 3 19 448. 04 Grievances of the petitioners is that though the budget was sanctioned under the head from which salaries were to be paid it was being appropriated to other head as a result of which there were irrergularities in paying salaries to the employees by the Panchayat and in fact salaries were not paid for the months of May and June 1980. It is also the case of the petitioners that they are entitled to dearness allowance on the same basis as is being paid by the State Government to its employees. According to the petitioners the respondent-Panchayat was not paying additional dearness allowance though the employees were entitled to get over and above the pay-scale dearness allowance in accordance with the Government Rules and Regulations. ( 3 ) ). By the interim order dated 8th September 1980 the respondent Development Commissioner was directed to ascertain whether any further amount was payable by the respondent Panchayat. The president of the respondent-Panchayat had orally undertaken in the Court that the amount of Rs. 50 821 which was paid to the respondent-Panchayat would be utilised for payment of arrears of wages to the Panchayat Employees. The president of the respondent-Panchayat had orally undertaken in the Court that the amount of Rs. 50 821 which was paid to the respondent-Panchayat would be utilised for payment of arrears of wages to the Panchayat Employees. The respondent Development Commissioner on 5th September 1980 made a statement on oath that ordinarily Nagar and Gram Panchayats are given portion of the land revenue collected from the area comprised in the Nagar or Gram Panchayat as the case may be in accordance with the provisions of Section 195 of the Gujarat Panchayats Act 1961 In addition to this grant from 1st April 1976 compensation was given to Nagar or Gram Panchayats which were originally collecting taxes under the provisions of Section 178 (1) (vi) of the Gujarat Panchayats Act 1961 In case of the respondent-Panchayat the amount payable under the head of compensation came to Rs. 21 641 p. a. Thereafter by the order dated 29-1-80 the statement on behalf of the respondent-Panchayat was made to the effect that out of the unpaid outstanding wages of the Panchayat Employees for a period for three months wages for a period of two months will be paid to the employees immediately appears that payment of wages for the said period was accordingly made. Therefore grievances regarding arrears of salary for the months or May and June 1980 does not survive since thereafter the court is not moved for any further interim orders it appears that the employees are being paid their salary regularly. ( 4 ) ). A Division Bench of this Court in R. K. Soni and Ors. v. State of Gujarat and Ors. (AIR 1977 Gujarat 76 ) by construing the provisions of Section 203 of the said Act held that the Panchayat Service constituted under the said Act was a State Service with the State as the master. Each and every officer or servant employed in the Panchayat Service is the Servant of the State and not of the Panchayat under which he may serving for the time being. Each and every officer or servant employed in the Panchayat Service is the Servant of the State and not of the Panchayat under which he may serving for the time being. Such a single service has been constituted with the end in view of bringing about uniform scales of pay and uniform conditions of service for persons employed in the discharge of functions and duties of panchayats irrespective of the different sources from which they were drawn and widely differing scales of pay and conditions of service applicable to them before their allocation to the Panchayat Service. ( 5 ) ). The Supreme Court in Mathuradas Mohanlal Kedia and Ors. v. S. D. Munshaw and Ors. (AIR 1981 S. C. 53 held that unless the Panchayat Service is held to be a State Service inclusion of officers and servants in the State Service will be unconstitutional. Though in Section 203 of the said Act it is stated that the Panchayat Service shall be distinct from the State Service having regard to the broad features of the Panchayat Service the said declaration appears to have been made only to distinguish the Panchayat Service from other services of the State attached to the several departments which are under the direct control of the State Government. It was also held that merely because the Panchayats are declared to be body corporate it cannot be said that any of the persons working under them cannot be considered as members of a civil service under a State. The Panchayats constituted under the Panchayats Act derive their authority from the statute and are under the control of the State Government. They form part of the local self-Government organisation which the State Government is under an obligation to foster under Article 40 of the Constitution. The Panchayat Service constituted under Section 203 of the Panchayats Act has at the characteristics of a Civil Service of the State and is a Civil Service of the State of Gujarat. ( 6 ) ). This decision of the Supreme Court was followed in a later decision in State to of Gujarat and Anr. v. Raman Lal Keshavlal Soni and Ors. reported in AIR 1984 Supreme Court 161 which affirmed the decision of the Gujarat High Court in R. K. Soni supra. ( 6 ) ). This decision of the Supreme Court was followed in a later decision in State to of Gujarat and Anr. v. Raman Lal Keshavlal Soni and Ors. reported in AIR 1984 Supreme Court 161 which affirmed the decision of the Gujarat High Court in R. K. Soni supra. It was held that the Panchayat Service constituted under Section 203 of the Gujarat Panchayats Act is a civil service of the State and the members of the service are Government servants. It was also held that the High Court was justified in directing the State Government to discharge its statutory duty to make orders for the equation of posts and to extend the benefits arising out of the reports of the two Pay Commissions in question which benefits had been denied to the local cadre only. In the process it was observed that the expenditure towards the pay and allowance of officers and servants to the Panchayat Service serving for the time being under any Panchayat has no doubt to be met by the Panchayat from its own fund but the fund consists substanstially of sums contributed or lent by the State. Government and of the proceeds of any tax or fee imposed by or assigned to the Panchayat under the Act. The imposition of a tax or a fee in the nature of a tax is essentially a function of the State. So the salary and allowance of the servants and others of the Panchayat service are paid out of funds contributed or lent by the Government or raised by the discharge of an essential governmental function. ( 7 ) ). In view of this legal position which recognises the employees in Panchayat Service as servants of the State the Panchayat employees become entitled to the benefits arising out of employments which are being paid to the State Employees. There was therefore no valid reason for the respondent Panchayat to withhold the salary and other emoluments to which the petitioners were entitled including the admissible Dearness Allowance. The respondentpanchayat and its successors are therefore directed to pay the salaries and other employments including dearness allowance as may be admissible to the petitioners-employees under their service conditions and in accordance with law Rule made absolute accordingly with noorder as to cost. .