Temporary operating arrangement without transfer of ownership does not trigger stock-transfer tax under section 9(2).

Section 9(2) of the Rajasthan Sales Tax Act, 1954 applies only when a dealer transfers ownership of part of its business. A temporary arrangement allowing a sister concern to run and operate the factory for a fixed period, while the dealer retained the essential incidents of ownership, did not satisfy that requirement. The agreement covered only stock and operational control during the arrangement and did not transfer land, buildings, fixed capital, liabilities, account books, employees, goodwill, or the power to consume, destroy or alienate the business. Transfer of stock alone was insufficient, so the transaction was outside section 9(2) and the dealer remained liable to tax on the tractor spares.

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Issues: (i) Whether the arrangement between the dealer and its sister concern amounted to a transfer of ownership of part of the dealer's business so as to attract section 9(2) of the Rajasthan Sales Tax Act, 1954.

Analysis: Section 9(2) applies only where a dealer transfers the ownership of a part of its business. The arrangement in question was a temporary agreement permitting the sister concern to run, operate and work the factory for a fixed period, while the dealer retained the essential incidents of ownership. The agreement provided only for taking over stock and operating the factory during the subsisting arrangement, but did not transfer assets such as land, buildings, fixed capital, liabilities, account books, employees, goodwill, or the right to consume, destroy or alienate the business. The transfer of stock by itself did not amount to transfer of ownership of the business, and the statutory precondition for invoking section 9(2) was therefore not satisfied.

Conclusion: The transaction was not covered by section 9(2) of the Rajasthan Sales Tax Act, 1954 and the dealer remained liable to tax on the tractor spares.

Final Conclusion: The revision succeeded, the order of the assessing authority was restored on the disputed tax liability, and the contrary findings of the appellate authorities were set aside.

Ratio Decidendi: A temporary arrangement to run and operate a business, without transfer of the essential incidents of ownership, does not amount to transfer of ownership of part of the business for the purpose of a provision taxing stock transferred on such transfer.

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