V. V. S. RAO, J. ( 1 ) GUDIVADA Chowkadhara Dukanadarula sangham (hereafter called the association ), a society registered under the Societies Act filed the instant writ petition seeking a declaration that the third respondent, gudivada Municipality or its contractors cannot levy and collect any fee or cess for the foodgrains supplied by respondents 1 and 2 for the purpose of supplying to the card holders through public distribution system. The members of the petitioner-Association are fair price shop dealers in Gudivada town. The fourth respondent herein got issued a legal notice to the President of the petitioner-Association informing that the fourth respondent became the highest bidder in the public auction conducted on 17-3-1997 for the lease of rights to collect municipal cess in the municipal market areas and that he is entitled to collect the cess at Rs. 100/- per lorry, Rs. 35/- per mini lorry and Rs. 12/- per cart-load which will be unloaded within Gudivada Municipal limits. The President of the petitioner- association was asked to co-operate with the second respondent as the fourth respondent is required to pay an amount of rs. 88,000/- to the municipality every month, besides paying Rs. 40,000/- towards salaries of his staff. ( 2 ) AFTER receiving the legal notice from the fourth respondent, the petitioner filed the writ petition contending that the fair price shop dealers are the agents of the Government and, therefore, the municipality has no power or authority to levy cess or collect fees from them. ( 3 ) THE third respondent municipality has filed a counter-affidavit through its commissioner. It is stated that as per the provisions of the A. P. Municipalities Act, 1965 ( the Act for brevity), the municipality is empowered to collect fee on rice and other foodgrains. The Government, by g. O. Rt. No. 21, Municipal Administration department, dated 5-1-1996 clarified the same and that the municipality in its resolution No. 329, dated 30-12-1996 has resolved to implement the said Government order and called for objections from the general public by issuing a notification dated 29-1-1997. Pursuant to such notification, the members of the petitioner- association or the petitioner have not raised any objection. Therefore, final notification was published in the District Gazette on 26-2-1997 and auction was conducted on 10-3-1997. The fourth respondent has become the highest bidder and the auction was confirmed in his favour. Pursuant to such notification, the members of the petitioner- association or the petitioner have not raised any objection. Therefore, final notification was published in the District Gazette on 26-2-1997 and auction was conducted on 10-3-1997. The fourth respondent has become the highest bidder and the auction was confirmed in his favour. The allegation that the members of the petitioner- association are only agents of the government is denied stating that the fair price shop dealers get their commission and, therefore, the municipality is entitled to collect fee. ( 4 ) SRI P. R. Prasad, learned counsel for the petitioner, placing reliance on various clauses on A. P. Scheduled Commodities (Regulation of Distribution by Card System) order, 1973 (hereafter called the Control order ), submits that all the fair price shop dealers are not business people or tradesman. They are only acting as authorized agents of the Government for distribution of essential commodities under public distribution system (PDS ). Being the agents of the Government, they are not liable to pay cess on the lorries transporting rice and other essential commodities. ( 5 ) PER contra, Sri D. Srinivas, learned Standing Counsel for Gudivada municipality, submits that as per the government Orders, the Municipality is entitled to collect fee on the rice. Accordingly, a resolution was passed and objections were invited. The petitioner- society did not file any objections and, therefore, a notification was issued in the district Gazette inviting tenders/ applications for conducting auction of the right to collect cess on the lorries transporting essential commodities. ( 6 ) THE question that requires consideration is whether the fair price shop dealers appointed under the Control Order are exempted from municipal taxation on the ground that they are agents of the government in public distribution system? ( 7 ) THE Control Order made by the State Government deals with distribution of essential commodities to fair price shops. Under Clause 3 (1) of the Control Order the competent authority appoints a fair price shop dealer for a village or a specified area. The ration card holders who are assigned to a particular shop can draw their essential commodities from the authorized fair price shop dealer in respect of whom a ration card is issued. A fair price shop dealer is required to give deposit which can be forfeited for any contravention of the conditions of authorization or contravention of the control Order. The ration card holders who are assigned to a particular shop can draw their essential commodities from the authorized fair price shop dealer in respect of whom a ration card is issued. A fair price shop dealer is required to give deposit which can be forfeited for any contravention of the conditions of authorization or contravention of the control Order. The authorization can be cancelled or suspended for any contravention of the provisions of the control Order or conditions of authorisation. A reading of the various clauses in the Control Order would show that the authorized dealer is not an independent businessman or tradesman. He cannot distribute or deal in other essential commodities which are not supplied by the government. ( 8 ) THE procedure of supplying essential commodities may be noticed. Every authorized fair price shop dealer is allotted certain quota of rice, sugar, edible oils etc. depending on the number of ration cards attached to such shop. All the Mandals have mandal Level Stock Point (MLS point ). Before the end of first week, every fair price shop dealer has to pay the value of the essential commodities by way of a Demand draft and approach the designated officer (usually MRO or Deputy Tahsildar) and get an order of release from MLS point. On such release order being produced by the dealer, such stocks will be delivered and the lorry carrying the stocks has to follow a particular route to reach the fair price shop/shops. It is brought to the notice of this Court that all the lorries/other vehicles transporting essential commodities on a particular route are accompanied by a route officer who is in-charge of door delivery of essential commodities. This is to ensure that the stocks which left the MLS point are not diverted to black market and/or not misused. After taking delivery, the fair price shop dealer would distribute them to the cardholders at the prices fixed by the government. Therefore, from the stage of lifting the stocks from MLS point till the essential commodities are delivered to the cardholders, public distribution system is regulated and controlled by the government. The fair price shop dealer cannot act independently either in purchasing stocks in the open market, fixing the price or distributing the commodities to the cardholders. Therefore, from the stage of lifting the stocks from MLS point till the essential commodities are delivered to the cardholders, public distribution system is regulated and controlled by the government. The fair price shop dealer cannot act independently either in purchasing stocks in the open market, fixing the price or distributing the commodities to the cardholders. Though it cannot be said to be relationship of principal and agent in strict terms of the concept of agency, it is clear that the fair price shop dealers are not business people like others. Such being the situation, can the Municipality levy tax or cess on the activities of price shop dealer? ( 9 ) IT would be pertinent to refer to the relevant provisions of the Municipalities act. Under Section 263 read with Schedule iv of the Act, no place within the municipal limits or at a distance within 3 k. ms. of such limits shall be used without licence of the commissioner. Schedule IV provides a list of businesses/activities which require a licence commonly called trade licence. Sections 276 to 278 of the Act deal with control and regulation of public markets in a municipal area. Section 277 gives certain powers to the municipality. The same may be extracted as under. 277. Power in respect of public markets: (1) The Council may provide places for use as public markets. (2) The council may, in any public market, levy any one or more of the following fees at such rates and may place the collection of such fees under the management of such persons as may appear to it proper or may form out such fees for any period not exceeding one year at a time and on such terms and subject to such conditions as it may deem fit: (a) fees for the use of, or for the right to expose goods for sale in such markets; (b) fees for the use of shops, stalls, pens or stands in such markets; (c) fees on vehicles or pack-animals carrying, or on persons bringing goods for sale in such markets; (d) fees on animals brought for sale into, or sold in such markets; and (e) licence fees on brokers, commission agents, weight-men and measures practicing their calling in such markets. (3) The council may, with the sanction of the Government close any public market or part thereof. (3) The council may, with the sanction of the Government close any public market or part thereof. (4) The council may lease any land, shop, godown, building or terrace of a building owned by it and situated anywhere in the municipality for any period not exceeding five years at a time and subject to such terms and conditions as the council may deem fit: provided that it shall be competent for the council to grant, with the prior sanction of the Government, any such lease for a period exceeding five years but not exceeding twenty-five years at a time. ( 10 ) BY reason of sub-section (2) of Section 227 of the Act, it is legitimate to municipal council to levy fees for the use of right to expose goods for sale in the market; fees for use of shops, stalls; fees on vehicles or pack-animals carrying, or on persons bringing goods for sale to such market and licence fee on brokers, commission agents, weight-men etc. When the council decides to close any public market, sanction of the government is required under sub-sec. (3) of Section 277 of the Act. ( 11 ) LEARNED counsel for the petitioner placed strong reliance on Section 259 of the act in support of the contention that the government is exempted from paying any kind of fees to the municipality under section 277 (2 ). Sub-sections (1) and (2) of section 259 read as under. 259. Central or State Government not required to take out licence etc. : (1) The State Government or the central Government shall not be required to take out any licence as provided by or under this Act in respect of their property or in respect of any place in their occupation or under their control. 259. Central or State Government not required to take out licence etc. : (1) The State Government or the central Government shall not be required to take out any licence as provided by or under this Act in respect of their property or in respect of any place in their occupation or under their control. (2) The State Government or the central Government shall not be required to obtain any permission as provided by or under this Act in respect of erection, re-erection, construction, alteration or maintenance of buildings used or required for the public service or for any public purpose which is the property, or in the occupation of the government concerned, or which is to be erected on land, which is the property, or in the occupation of the government concerned, or which is to be erected on land, which is the property, or in the occupation, of the Government concerned: provided that, where the erection, re-erection, construction of material structural alteration of any such building as aforesaid (not being a building connected with defence, or a building the plan or construction of which, in the opinion of the government concerned, is treated as confidential or secret) is contemplated, reasonable notice of the proposed work shall be given to the council before it is commenced. (Sub-section (3) and (4) are omitted) ( 12 ) A plain reading of the above provision would show that under sub- section (1) of Section 259, State or Central government is not required to take out any licence as provided under the Act in respect of (i) their property; (ii) in respect of any place in their occupation or under their control. Under sub-sec. (2) of Section 259, state or Central Government is not required to obtain any permission for construction of building for public service or for public purpose on any land which is property or in occupation of the Government. ( 13 ) CHAPTER I of Part IV of the Act deals with taxes. Section 88 of the Act exempts places of public worship, choultries, recognized educational institutions, ancient monuments, charitable hospitals, burial grounds, buildings and lands belonging to the council, irrigation works vesting in the government and all Government properties not being buildings or lands, from payment of property tax. It is necessary to notice section 88 (l) (i) which reads as under. Section 88 of the Act exempts places of public worship, choultries, recognized educational institutions, ancient monuments, charitable hospitals, burial grounds, buildings and lands belonging to the council, irrigation works vesting in the government and all Government properties not being buildings or lands, from payment of property tax. It is necessary to notice section 88 (l) (i) which reads as under. 88 (l) (i) The following buildings and lands shall be exempt from the property tax: any irrigation work vesting in the government including the bed of water-course or any building or lands adjacent and appertaining to such irrigation work; all lands belonging to or under the control of the Government including the vacant lands specified in Section 37 and all such other government property, being neither buildings nor land, from which, in the opinion of the Government the income could be derived as may, from time to time be notified by the Government in the Andhra Pradesh Gazette: provided that nothing in clauses (a), (c) and (e) shall be deemed to exempt from property tax any building or land for which rent is payable by the person or persons using the same for the purposes referred to in the said clauses. ( 14 ) UNDER sub-section (5) of Section 88 of the Act, the council may, by resolution, exempt any class of building or land from the payment of property tax. Chapter IV of part IV deals with building regulations. Every person who intends to construct or re-construct a building has to obtain permission from the Municipal commissioner. By reason of Section 259 of the Act, the Government is not required to obtain any permission for construction or reconstruction of building on their land. Under Section 88, Government buildings and lands are not exempted from payment of property tax. By reason of sub-section (1) of Section 259 of the Act, the State or Central government are not required to take out any licence under Section 263 read with schedule IV. Likewise, under sub-section (2) of Section 259, State and Central government are not required to obtain permission for erection or construction of building under Section 209 of the Act. When we come to Section 277, like Section 88 (1) (i), it does not either explicitly or impliedly exempt the Government from paying fees to the municipal council. Likewise, under sub-section (2) of Section 259, State and Central government are not required to obtain permission for erection or construction of building under Section 209 of the Act. When we come to Section 277, like Section 88 (1) (i), it does not either explicitly or impliedly exempt the Government from paying fees to the municipal council. Having regard to the language in various provisions referred to and discussed hereinabove, can it be said that fair price shops are exempted from paying cess on the lorries carrying rice? ( 15 ) LEARNED counsel for the petitioner has placed reliance on the judgment of a division Bench of this Court in M/s. Navata road Transport v. State ofa. P. Therein, a notification issued by Chirala Municipality levying tax of Rs. 30/- on loading and unloading from lorries was challenged as ultra vires and without jurisdiction. All the petitioners therein were goods carriage permit holders paying necessary tax under a. P. Motor Vehicles Taxation Act. They contended before the Division Bench that a tax is not relatable to Section 277 of the Act and that levy of tax under Section 81 is invalid and without jurisdiction. The municipality justified the levy under section 277 (2) (c) of the Act which enables the municipality to levy fees on vehicles carrying goods for sale in public market. The division Bench after referring to Secs. 276 and 277 of the Act concluded that municipality has no power to issue notification under Section 277 (2) (c) and, therefore, levy of fees on loading and unloading is without jurisdiction. I have perused the judgment of the Division Bench. The point for consideration in the said writ petition is altogether different. The question before this court is not whether the municipality is competent to issue a notification under Section 277 (2) (c) of the act or not. The question is whether fair price shop dealers are liable to pay cess on the lorries carrying rice. While noticing various provisions of the Act, this court has already come a conclusion that except Section 259 of the Act exempting Central and State government from obtaining a licence or permission, no such provision is there either under Section 88 or Section 277 exempting the Government or its agents from obtaining licence or permission and paying fees under section 277. On chis aspect, this court is also supported by a nine-Judge Bench decision of the Supreme Court in New Delhi Municipal council v. State of Punjab. ( 16 ) IN New Delhi Municipal Council v. State of Punjab (2 supra), a question arose whether the properties of the State situated in the union Territory of Delhi are exempt from property taxes levied under Punjab municipal Act, 1911 as extended to New delhi Municipal Council area. ( 17 ) HON ble Sri Justice B. P. Jeevan Reddy, in his majority opinion, having regard to the history of the Punjab Municipal Act and having regard to the Parliament to make laws of Union Territory, held that taxation under Punjab Municipal Act and New Delhi municipal Corporation Act come within the expression union taxation occurring in article 289 (1) of the Constitution of India. His Lordship referred to the provisions of the two enactments and held that having regard to the omission in the relevant provisions of exempting the State properties from municipal taxation, Section 115 (4) of the Delhi Corporation Act and Section 61 of the Punjab Municipal Act and Section 62 of the New Delhi Municipal Council Act provided exemption in favour of the property of the State. The relevant placitum from the head note is relevant and apt to quote. Question is whether the Punjab municipal Act, the Delhi Municipal corporation Act and the NDMC Act are or can be deemed to be enactments within the meaning of clause (2) of article 289. These enactments and certainly the Delhi Municipal corporation Act and the NDMC Act are post-constitutional enactments. These enactments while specifically exempting the Union properties in terms of Article 285, do not exempt the properties of the States in terms of article 289. The omission cannot be said to be unintentional - particularly in the case of Delhi Municipal corporation Act and the NDMC Act. The intention is clear and obvious: the enactmertts do not wish to provide for any exemption in favour of properties of the States situated within their respective jurisdictions. Taxes are levied on all properties within their jurisdiction (except the properties specifically exempted), irrespective of who owns them and to what use they are put. . . . . . . . . . Taxes are levied on all properties within their jurisdiction (except the properties specifically exempted), irrespective of who owns them and to what use they are put. . . . . . . . . . (emphasis supplied) it was also observed that if the property owned by the State Government in Union territory of Delhi is put to commercial use to generate revenue, it is not exempted from paying municipal tax/property tax. ( 18 ) APPLYING the above principle and having regard to the specific provisions like section 259 (1) and (2) of the Act, which do not require State and Central Government to obtain licence or permission and having regard to Section 88 (1) (i), which exempts irrigation works of the Government alone, their property, taxes (specifically says that buildings and lands are not exempted from municipal taxation) and also having regard to any omission in Section 277 of the Act, it must be held that even the Government property, unless it is specifically exempted under Section 88 (5) of the Act and government activities are liable to taxes. Even when the Government carries on activities in a public market, they are liable to pay market fee under Section 277 (2) of the act, Afortio ran, fair price shop dealers who are authorized dealers of the Government for distribution of essential commodities are also liable to pay fees or cess. It may also be noticed that it is the fair price shop dealer who has to pay the tariff to the lorry only for transporting essential commodities and such transport lorries are not Government properties or Government lorries. It may also be noticed that it is the fair price shop dealer who has to pay the tariff to the lorry only for transporting essential commodities and such transport lorries are not Government properties or Government lorries. ( 19 ) IN the result, the writ petition is disposed of in the following manner: (i) Under the A. P. Municipalities Act, 1965, State or Central Government are not required to obtain licence under Section 263 of the Act; (ii) The State or Central Government are not required to obtain permission under Section 209 of the Act for construction, reconstruction, erection or re-erection or alteration or maintenance of any building which is the property and in occupation of the Government and which is used for public service or public purpose; (iii) Irrigation works vesting in the government, land belonging to or under the control of the government under Sec. 37 of the act, and all properties are exempted from payment of property tax as per Sec. 88 (1) (i) of the Act; (iv) Buildings and lands of the government from which income is derived are, however, not exempted as per Sec. 88 (1) (i) of the act; (v) Section 277 of the Act does not specifically exempt the government or their agents from paying cess or market fees under section 277 and such omission has a bearing in interpreting the provisions of Section 277. (vi) The members of the petitioner- association though they are authorized fair price shop dealers for distribution of essential commodities under public distribution system are liable to pay market fees and cess validly imposed by the municipal council of Gudivada; and (vii) There shall be no order as to costs.