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1998 Supreme(Bom) 543
IN THE HIGH COURT OF BOMBAY
Dr. B.P. Saraf A.Y. Sakhare, JJ.
The Commissioner of Sales Tax ..... Applicant.
Versus
M/s. Bombay Sound Service and others.... Opponent.
Sales Tax Reference No.s 59, 61, 62, 65, 66 67 of 1997, decided on 16-9-1998.
Advocates appeared :
N.T. Saraf with Mrs. M. Kajle, for the applicant in all reference.
B.S. Gaitonde, for the opponent in ref. No. 59, 62, 65, 66 67.
P.V. Surte, for the opponent in S.T.R. No. 61.
S.S. Gaitonde, for the opponent in S.T.R. 62, 65 66.
Headnote:Maharashtra Sales Tax on Transfer of Right to use any Goods for any Purpose Act, 1985
Section 2(10)-Hiring of cine studios for charges for the purpose of recording songs, background music and dubbing of sound does not amount to transfer of right to use any movable properly and hence such transactions do not fall within the definition of "sale" as contained in Section 2(10) and hence hire charges in respect of the transactions not liable to tax under the Act.- The levy of tax under Maharashtra Sales Tax on Transfer of Right To Use Any Goods For Any Purpose Act is on the turnover of the sales of a dealer in respect of transfer of right to use any goods specified in the schedule. Goods have been defined specifically to mean "all kinds of movable property". The definitions of "sale price" and "turnover of sales" also make it clear that the taxis on the amount of valuable consideration received or receivable for the transfer of right to use any goods, meaning thereby movable property. The expression "movable property" has not been defined in the Act. This expression, however, has been defined in clause (31) of Section 3 of the Bombay General Clauses Act, 1904 to mean property of every description except immovable property. "Immovable property" has defined in clause (24) of the same section to include land, benefits arising out of land and things attached to the earth. Identical definition of these two expressions is found in the Central General Clauses Act,
1897. If a thing is emboided to the earth or attached to what is so boided for the permanent beneficial enjoyment of that to which it is attached, then it is part of the immovable property. On the other hand, if the attachment is mainly for the beneficial enjoyment of the movable property itself, then it remains movable property even though fixed for the time being for proper enjoyment thereof, The recording of songs, background music and dubbing of sound can be done only in studios which are fully equipped for that purpose. It is not possible to undertaken these activities anywhere and everywhere even with the aid of the very same machines or equipment ... which are fitted or installed permanently in the studios. In fact, what is really required is the studios and tile instalments for recording of songs etc. are essential part of the studio, There cannot be any studio without such equipments, The construction of studio is a very sophisticated task and what is taken on hire is the studio and not the recording machines and instrument installed there. The various instruments for recording music declare annexed or emboided to the earth for till purpose of beneficial enjoyment of the studio which is an immovable property and not for the beneficial enjoyment of those instruments. The instruments are essential fixtures of studios. Then cannot be studio without those instruments and equipments, In view of the above, hiring of studios for the purpose of recording songs, background music and dubbing of sound does not amount to transfer of right to use any movable property" and hence such transactions do not fall Within the definition of sale as contained in clause (10) of Section 2 of the Act and are not taxable under the Act. AIR 1955 Pat 375; (1984) 146 ITR 1, Relied on.
"(i) Whether on the facts and in the circumstances of the case and on a true and correct interpretation of section 2(10) of the Maharashtra Sales Tax on Transfer of Right to use any Goods for any Purpose Act, 1985 was the Tribunal justified in law in holding that the transaction in regard to charges received for recording of song on 30-3-88 for Parbat Ke Uspar, Invoice No. 87/88/618 dated 30-3-88 was issued by the respondents is not a sale liable to tax under the provisions of the said Act?
(ii) Whether on the facts and in the circumstances of the case and on a true and correct interpretation of section 2(10) of the Maharashtra Sales Tax on the transfer of Right to use any Goods for any Purpose Act, 1985, was the Tribunal justified in law in holding that the charges received for background music recording of Andha Yudh and for which Invoice No. 87/88/613 dated 29-3-88 was issued by the respondents is not a transaction of sale liable to tax under the said Act?
(iii) Whether on the facts and in the circumstances of the case and on a true and correct interpretation of section 2(10) of the Maharashtra Sales Tax on Transfer of Right to use any Goods for any Purpose Act, 1985, was the Tribunal justified in law in holding that the charges received for songs dubbing done for the picture Parbat ke Uspar and for which Invoice No. 87/88/620 dated 31-3-88 has been issued, is not a transaction of sale liable to tax under the said Act?"
These three questions arise out of the common order of the Tribunal in six appeals of six different assessees. As the facts and circumstances of all these cases as also the legal issues involved are common, the Tribunal disposed of all the six appeals by a common order and at the instance of the revenue made this common reference and referred the above questions of law arising therefrom.
2.The assessees in all the six cases are the owners of cine laboratories and studios. All the studios are located in Mumbai. These studios are fully air tight and air conditioned. In these studios sound recording instruments are permanently installed with electric fittings etc. The assessees do the job of sound recording, re-recording, dubbing, mixing and transferring the sound on the negative films. These studios are taken on hire by the film producers for recording songs on shift basis. The recordists, projector operators and helpers are engaged in the studios on permanent basis by the assessees who are the owners of the studios. They are the employees of the assessees. When a song is recorded, the musicians sit in the hall with their musical instruments like piano, drum, harmonium, trumpet, accordion, flute, violin, mouth organ etc. In one corner of the hall singer or the singers sit with microphones to sing the song along with accompaniments of the music being played by the musicians. The sound from the different microphones known as channels are fitted into a big console known as the sound mixing console which is installed in the control room. The recordist is the employee of the studio owners. The sound comes in from the various microphones is mini-theatre on large speakers installed in the control rooms. By means of the switches and knobs on the mixing console, the recordist mixes the inputs from the various channels and achieves an ideal balance. The rehearsal of the playing of music is always at the direction of the music director, who is employed by the film producer. When the music director is satisfied with the complete song as played and sung and mixed by the recordist, the entire song is recorded in the mixing console into a magnetic tape by means
