JUDGMENT

- Dr. Saraf B.P., J.:—

By this reference under section 61(1) of the Bombay Sales Tax Act, 1959 made at the instance of the revenue, the Maharashtra Sales Tax Tribunal has referred following question of law to this Court for opinion:

“Whether on the facts and circumstances of the case, the Tribunal was justified in law in holding that the activity of recording songs and programmes on blank cassette tape does not bring into existence a commercially different commodity and the activity did not amount to “manufacture” within the meaning of sub-section (17) of section 2 of the Bombay Sales Tax Act, 1959? ”

2. The assessee deals in cassette-tapes. On 25th August, 1978, he purchased 1050 pieces of C-60 (red) cassette-tapes at the rate of Rs. 10/- per piece from one M/s Teisco Electronics on payment of sales tax at the rate of 15 paise in a rupee. These cassettes were then given by the assessee to one M/s Oriental Melodies for recording songs and programmes for which a sum of Rs. 5/- per cassette was charged by the said concern. From these cassettes, 35 cassettes with the pre-recorded songs and programmes were sold to one M/s Bharat Electronics Corporation as per bill dated 18th September, 1978. A controversy arose as to whether recording songs and programmes on cassette tapes amounted to “manufacture” within the meaning of section 2(17) of the Bombay Sales Tax Act, 1959 (“Act”).

3. The assessee, therefore, made an application under section 52(1) (b) of the Act seeking determination of the question whether the activity of recording songs and programmes on the cassettes purchased by the assessee resulted in manufacture of goods within the meaning of section 2(17) of the Act. The Deputy Commissioner of Sales Tax, who determined the controversy, held that the activity of recording songs and programmes on cassettes with blank tapes amounted to manufacture, because as a result of this activity a new article viz. cassettes with recorded songs and programmes came into existence which was different and distinct from cassettes purchased by the assessee with blank tapes. Aggrieved by the above determination of the Deputy Commissioner, the assessee appealed to the Maharashtra Sales Tax Tribunal (“Tribunal”). It was contended by the assessee before the Tribunal that the activity or recording songs did not result in emergence of a new commodity amounting to manufacture. According to the assessee, the cassettes remained cassettes despite recording of songs and programmes. It was pointed out that the recorded of songs and programmes could be easily wiped out and the tapes restored to their original condition of blank tapes. The Tribunal found merit in the above contentions of the assessee and held that by reason of the activity of recording songs and programmes on the blank cassette tapes, no physical change took place in the tapes, and the tapes, even after recording, remained tapes. No new commercially different commodity came into existence. It, therefore, held that the activity of recording songs and programmes on blank cassettes did not amount to “manufacture”. Hence, this reference at the instance of the revenue.

4. We have carefully considered the submissions of the parties. There is no controversy in regard to the nature of the activity carried on by the assessee which comprises; inter alia, of purchasing blank cassette tapes, getting songs and programmes recorded thereon, and selling the same, According to the revenue, the process of recording songs and programmes amounts to “manufacture” or “production” of recorded cassettes. The contention of the assessee, on the other hand, is that by any stretch of imagination, such process cannot be held to be process of manufacture. The expression “manufacture” is defined in section 2(17) of the Act to mean: “producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods except such manufactures or manufacturing process as any be prescribed.”