Who recommends to the Governor, the principles which should govern the distribution between the state and the panchayats of the net proceeds of the taxes, tolls and fees leviable by the state which may be divided between them?

The State Finance Commission (constituted under Article 243I) recommends to the Governor the principles governing tax distribution between the state and panchayats. Zilla Parishad is a local body, not an advisory body. The Chief Minister and Finance Minister are political executives, not constitutional bodies authorized to make such recommendations under the 73rd Amendment framework.