Taxable turnover excludes disposal of discarded capital assets, and post-sale credit-note rebates do not reduce contractual sale price.

Sales of discarded capital assets are not included in taxable turnover where the disposals are merely realisations of machinery, stores, scrap or other unserviceable articles and are not carried on as a business of selling goods. The relevant inquiry is whether the sales form part of the dealer's business activity; mere frequency, repetition, or collection of tax from purchasers is not conclusive. Post-delivery rebates granted by credit note do not reduce turnover where the original contracts were already performed and there is no legally effective novation supported by consideration. The taxable sale price remains the contractual price receivable under the original bargain.

---

---

Issues: (i) Whether sales of old machinery, stores, scrap and similar unserviceable articles were liable to be included in taxable turnover as sales effected in the course of business. (ii) Whether rebate granted after execution and delivery under the original contract could be deducted from turnover on the plea of novation or reduced sale price.

Issue (i): Whether sales of old machinery, stores, scrap and similar unserviceable articles were liable to be included in taxable turnover as sales effected in the course of business.

Analysis: The charging provisions fastened tax on the turnover of a dealer carrying on the business of selling goods, so the decisive inquiry was whether the disputed disposals had the character of business sales. The Court drew a distinction between sales of stock-in-trade, subsidiary or bye-products arising from manufacture, and sales of capital assets or discarded materials realised when machinery was replaced or goods became unserviceable. Mere repetition, volume, frequency, or the fact that tax had been collected from purchasers was held not to be conclusive. The surrounding circumstances showed that the machinery had been acquired for use in manufacturing textile goods, later replaced under a modernisation programme, and sold only as a realisation of assets, without an initial or operative intention to trade in such assets.

Conclusion: The sales of old machinery, stores, scrap and similar discarded articles were not sales in the course of business and were not includible in taxable turnover.

Issue (ii): Whether rebate granted after execution and delivery under the original contract could be deducted from turnover on the plea of novation or reduced sale price.

Analysis: The relevant measure of turnover was the sale price receivable under the contract, not merely the amount eventually realised after an ex post facto remission. The Court found that the alleged rebate was given by credit notes after the contracts had been performed by delivery and acceptance, and there was no consideration from the purchasers to support novation or substitution of the original bargains. In substance, the remission was only an indulgence granted after the sale price had already become due under the original contract, and could not alter the taxable sale price for turnover purposes.

Conclusion: The rebate could not be deducted from turnover, and the original contract price remained the relevant sale price.

Final Conclusion: The references were answered by holding that sales of discarded capital assets were outside taxable business turnover, while post-sale rebates did not reduce the turnover computed on the contractual sale price.

Ratio Decidendi: For sales tax purposes, only sales made as part of the business of selling goods are includible in turnover, and a post-delivery remission by credit note does not alter the taxable sale price unless it amounts to a legally effective novation supported by consideration.

---