Trademark royalty as transfer of the right to use goods, attracting sales tax on the stated arrangement.

Royalty for permitting use of a trademark was treated as consideration for transfer of the right to use goods, making it taxable under sales tax law. The analysis states that a trademark is an incorporeal form of property within the wide statutory meaning of goods, and that a transfer of the right to use goods for consideration can amount to a deemed sale. It further notes that actual delivery or exclusive possession is not essential where the asset can be used by authorisation. On the stated facts, the arrangement was characterised as a transfer of the right to use the trademark rather than a mere licence.

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Issues: Whether royalty received for permitting use of a trademark amounted to consideration for transfer of the right to use goods and was therefore taxable under the sales tax law.

Analysis: The agreement permitted the licensee to use the trademark in the course of trade for a stated royalty. The licensor retained certain parallel rights, but the use granted to the licensee was unrestricted during the agreed period. A trademark is an incorporeal and transferable form of property, and the statutory definition of goods is wide enough to include intangible movable property. The controlling principle is that a transfer of the right to use goods for consideration constitutes a deemed sale, and actual delivery or exclusive possession is not essential where the nature of the asset permits use by authorisation. On the facts, the arrangement was not a mere licence to enjoy but a transfer of the right to use the trademark.

Conclusion: The royalty was taxable as consideration for transfer of the right to use goods, and the assessee's challenge failed.

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