Purchase turnover tax applies when goods bought for a commercial manufacturing business are consumed, not resold, in the same form.

A purchaser of tanning bark was treated as a dealer liable to tax on the purchase price where the bark was bought in the course of an organised commercial activity carried on with a profit motive. The sales tax definition of dealer was construed to cover business in buying, selling or supplying goods, and it was not necessary that the same commodity be resold in identical form. Because the bark was consumed in manufacturing another saleable product, the purchase-turnover rule still applied and the bark formed part of taxable turnover. The exclusion granted by the High Court was unsustainable, and the tax assessment was restored.

---

---

Issues: Whether a purchaser of tanning bark specified in the turnover rules is a dealer liable to tax on the purchase price when the bark is consumed in the manufacturing business and not resold as such.

Analysis: The definition of dealer under the governing sales tax law requires engagement in the business of buying, selling or supplying goods. Business in a taxing statute imports an organised commercial activity carried on with a profit motive. It is not necessary that the dealer must buy and sell the identical commodity. A person who buys a commodity in the course of trade and consumes it in the manufacture of another saleable article remains within the definition if the purchase is part of the integrated commercial activity undertaken for profit. The rule taxing purchase turnover of tanning bark is therefore attracted when the commodity is bought in the course of the business, even though it is used up in the tannery.

Conclusion: The respondents were liable to be treated as dealers in respect of the tanning bark and the purchase price formed part of the taxable turnover.

Final Conclusion: The exclusion granted by the High Court was unsustainable and the assessment made by the taxing authorities stood restored.

Ratio Decidendi: A commodity specified in a purchase-turnover rule is taxable when bought as part of a commercial activity carried on with a profit motive, even if the commodity is consumed in manufacturing another saleable product rather than resold in the same form.

---