Sale of capital assets of a discontinued business is not turnover in the course of business and is not taxable.

Sale of quarry machinery and other capital goods after the quarrying activity had already been discontinued was not turnover in the course of business. The quarry operation was treated as a separate and distinct business, and once it had ceased, the machinery and equipment became capital assets of a dead business; their sale was only realisation of capital investment, not a business transaction. Continuance of other lines of business did not extend the discontinued quarry activity for tax purposes. The turnover from such sale was therefore not taxable.

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Issues: Whether the sale of quarry machinery and other capital goods after discontinuance of the quarrying activity was liable to sales tax as turnover in the course of business.

Analysis: The quarrying activity was treated as a separate and distinct business, and the records showed that it had been discontinued in the preceding year. Once that business had ceased, the machinery and equipment sold later were only capital assets of a dead business, and their sale amounted to realisation of capital investment rather than a transaction carried on in the course of business. The fact that the assessee continued other lines of business did not make the discontinued quarry activity part of the same business for tax purposes.

Conclusion: The turnover from the sale of quarry machinery and equipment was not taxable.

Ratio Decidendi: Sale of capital assets of a business that has already ceased to be carried on is not a sale in the course of business and is not taxable as incidental or ancillary turnover merely because the assessee continues some other business.

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