Sale of business proceeds excluded from turnover; delegated rules cannot enlarge the statutory tax base.

Turnover under the sales tax law covers the aggregate price of goods sold, and a business as such is not goods. On that basis, proceeds from the transfer of an entire business are not part of taxable turnover, even if stock-in-trade sold with the business may be separately identifiable. The rule-making power can prescribe the manner of computing turnover, but cannot expand the statutory tax base. Rule 44(f) therefore cannot override the definition of turnover, and the distinction between single-point and multi-point goods is not determinative for a sale of business as a whole.

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Issues: Whether the sale proceeds realised on the transfer of the business as a whole were includible in the assessee's turnover for sales tax purposes, and whether rule 44(f) applied only where the goods were single-point or multi-point goods or where the transfer was by a person not liable to tax.

Analysis: Turnover under the Act means the aggregate amount for which goods are sold, and business is not goods. The sale of an entire business is therefore not, by its nature, a sale of goods and its proceeds do not form part of turnover. The statutory scheme separately deals with taxable turnover, exempt goods, and notified goods, while the rule-making power extends only to prescribing the manner of determining turnover, not to creating or enlarging the taxable base. Clause (f) of rule 44, which speaks of deduction of amounts realised on sale of business as a whole, cannot control the statutory definition so as to include in turnover what never was turnover. The distinction between single-point and multi-point goods is irrelevant to the sale of a business as such, though stock-in-trade sold along with the business may be includible if its proceeds are separately ascertainable.

Conclusion: The proceeds of sale of the business as a whole were not includible in turnover chargeable to tax, and rule 44(f) applied generally without regard to whether the goods were single-point or multi-point goods.

Final Conclusion: The reference was answered in favour of the assessee, with the sale proceeds of the business excluded from taxable turnover and the rule treated as having general application.

Ratio Decidendi: A delegated rule cannot enlarge the statutory concept of turnover; amounts realised on sale of a business as a whole are not turnover because a business is not goods.

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