Used capital assets sold after business use are not taxable turnover unless the sale is itself part of business activity.

Sale proceeds from used cars acquired for office use were not includible in taxable turnover under the Delhi Sales Tax Act because the vehicles were capital assets, not trading stock, and their later disposal was not shown to be incidental or ancillary to the assessee's manufacturing business. The text applies strict construction of taxing statutes and treats the prior taxation of the vehicles at purchase as reinforcing the absence of a sufficient business nexus for taxing the subsequent sale as business turnover.

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Issues: Whether the sale proceeds of used cars purchased for office use by a manufacturing assessee were includible in its turnover as part of its business under the Delhi Sales Tax Act, 1975.

Analysis: The definition of business under the Act extends to transactions in connection with, or incidental or ancillary to, trade, commerce or manufacture, and turnover is tied to sales of property in goods. On the facts, the cars were acquired for use by employees and executives and were not held as trading assets or for resale. Their later sale, after use and depreciation, was not shown to be ancillary or incidental to the manufacture and sale of pharmaceutical products. The court also applied the settled principle that a taxing statute must be strictly construed, and nothing can be read into it by intendment. The fact that the vehicles had suffered tax at the time of purchase under the earlier first-point regime reinforced that their subsequent sale, with little nexus to the assessee's business, should not be taxed as business turnover.

Conclusion: The sale of the used cars was not includible in the assessee's turnover and could not be taxed as business sales under the Act; the impugned orders were unsustainable.

Ratio Decidendi: Sale of goods used as capital assets in the course of business is not taxable turnover unless the sale is itself a business activity or is ancillary or incidental to the assessee's trading operations.

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