Manufacture requires a new and distinct commodity; recording on blank cassette tapes was only processing, not manufacture.

Recording songs and programmes on blank cassette tapes was held not to be manufacture under section 2(17) of the Bombay Sales Tax Act, 1959 because manufacture requires a transformation into a new and distinct commodity with a different name, character or use. A mere process that improves marketability, while the goods retain their essential identity, is only processing. On the facts, the cassette tapes remained cassettes, the recording was reversible, and no commercially different article emerged; the activity therefore did not amount to manufacture and the referred question was answered in favour of the assessee.

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Issues: Whether recording songs and programmes on blank cassette tapes amounts to manufacture within the meaning of section 2(17) of the Bombay Sales Tax Act, 1959.

Analysis: Manufacture under the Act requires more than a mere change in the goods; the process must bring about a transformation resulting in a new and distinct commodity with a different name, character or use. A process undertaken only to improve marketability, while the commodity retains its substantial identity, is processing and not manufacture. On the facts, recording songs and programmes on blank cassette tapes did not alter their essential identity. The recording was reversible, the cassettes remained cassettes, and no commercially different commodity emerged.

Conclusion: The activity did not amount to manufacture, and the answer to the referred question was in the affirmative and in favour of the assessee.

Ratio Decidendi: A process amounts to manufacture only if it results in a commercially distinct commodity losing its original identity and acquiring a different name, character or use; mere processing to make goods marketable is insufficient.

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