Sale of stone metal, not royalty, justified deduction from taxable turnover where title passed for consideration.

Consideration paid to a registered dealer for lifting stone metal from quarries was treated as price of goods, not royalty, because property in the stone metal passed for consideration and the existence of a Government lease with royalty obligations did not change the legal character of the transaction. The Court held that the arrangement was a sale rather than a mere permission to quarry or remove stones. As the payment represented the price paid to a registered dealer, it fell within the deduction provision and was deductible from taxable turnover.

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Issues: Whether the amount paid by the assessee to a registered dealer for lifting stone metal from quarries was price for a sale of goods or merely royalty, and whether the amount was deductible from taxable turnover.

Analysis: The assessee obtained stone metal from a registered dealer and paid consideration for the transfer of title in the goods. The fact that the quarries were leased by the dealer from the Government and that royalty was payable did not alter the legal character of the transaction where the property in the goods passed for consideration. The transaction was therefore a sale and not a mere permission to quarry or remove stones. Since the payment represented the price paid to a registered dealer, it fell within the deduction provision governing exclusion from taxable turnover.

Conclusion: The transaction was a sale, not royalty, and the amount paid was deductible from the taxable turnover. The answer to the reference was in favour of the assessee.

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