Business turnover test excludes isolated asset sale from sales tax where the dealer's trade does not include such transactions.

Tax is attracted only to sales made by a dealer in the course of business, and a casual sale of an asset does not become taxable merely because the seller is a registered dealer or the item formed part of its assets. The Bombay Sales Tax Act, 1946 definition of "dealer" and the turnover provisions require that the transaction bear the character of business activity, supported by sufficient volume or frequency of similar dealings. As the assessee's business was steel furniture and it had no motor car , the isolated resale of the managing director's car was not part of its trading operations and could not be included in taxable turnover.

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Issues: Whether the resale of a motor car purchased for use by the assessee's managing director, and subsequently sold as a single transaction, formed part of the assessee's business so as to be included in taxable turnover and subjected to sales tax.

Analysis: The definition of "dealer" under section 2(c) of the Bombay Sales Tax Act, 1946, and the charging and turnover provisions in sections 5, 6 and 2(j) show that tax is attracted to sales effected by a dealer in the course of business. A casual sale of an asset does not become taxable merely because the seller is a registered dealer or because the item formed part of its assets. The decisive factors are whether the transaction was carried out as part of the dealer's business and whether there is a sufficient volume and frequency of similar transactions to characterise it as business activity. On the facts, the assessee dealt only in steel furniture, had no business in motor cars, and the isolated resale of the car was not shown to be part of its trading operations.

Conclusion: The resale of the motor car was not a sale in the course of the assessee's business and its price could not be included in taxable turnover; the question was answered in the negative, in favour of the assessee.

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