Separate business unit sale qualifies for rule 6(d) exclusion despite common management and consolidated accounts.

Sale of machinery from a closed rolling mills unit qualified for exclusion under rule 6(d) because the unit had operated as a distinct and independent business segment with separate industrial licences and a separate nature of activity. Common management and a common balance-sheet did not prevent treatment of the unit as a separate business, and the fact that no part of its business was retained or continued after the sale supported that characterisation. On those facts, turnover from the sale was within the protective ambit of rule 6(d) as a sale of a business unit as a whole.

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Issues: Whether the sale of machinery relating to a closed rolling mills unit constituted the sale of a separate and independent unit as a whole so as to attract the benefit of rule 6(d) of the Tamil Nadu General Sales Tax Rules, 1959.

Analysis: The unit in question had functioned as a distinct and independent business segment, with its own industrial licences and separate nature of activity, even though the assessee maintained common management and a common balance-sheet for all units. The unit had been closed earlier and no part of its business was retained or continued after the sale. On these facts, the turnover arising from sale of the machinery of that unit fell within the protective ambit of rule 6(d), which applies where a particular unit of business is sold as a whole.

Conclusion: The turnover from the sale of the rolling mills machinery was rightly excluded under rule 6(d), and the assessee was entitled to the benefit of the rule.

Ratio Decidendi: Where a distinct and independent business unit is sold as a whole, the turnover attributable to that sale is eligible for the exemption or exclusion provided by rule 6(d), notwithstanding common management of other business units.

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