Burden of proof in sales tax matters rests first on the Revenue to establish taxable purchases before any shift to the dealer.

The charging provision under section 5(4) applied only if the Revenue first established that the disputed dealings were purchases within its scope. The burden-shifting proviso in section 5(7) operated only after taxability was shown, and not before the character of the transactions was proved. The Tribunal erred in treating the assessees as bound to conclusively disprove purchase character at the outset. On the record, the accounts supported the assessees' case of acting as selling agents, while the Revenue led no evidence to prove taxable purchases. The disputed transactions were therefore not liable to tax, and the assessments were set aside to that extent.

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Issues: Whether the Revenue had to prove that the disputed transactions were purchases exigible to tax under section 5(4) of the Mysore Sales Tax Act, 1957, and whether the burden under section 5(7) shifted to the assessees before the character of the transactions was first established.

Analysis: The liability under section 5(4) could arise only if the Revenue first established that the transactions were purchases falling within that provision. The proviso in section 5(7) placing the burden on the dealer operates only after it is shown that the transaction is otherwise liable to tax and then only to prove that it is exempt or not taxable for a particular reason. On the material before it, the Tribunal had wrongly proceeded on the footing that the assessees had to conclusively prove that the transactions were not purchases. The accounts produced by the assessees supported their case that they acted as selling agents, and the Revenue led no evidence to prove that the transactions were purchases.

Conclusion: The burden lay on the Revenue to establish taxability under section 5(4), and it failed to do so. The transactions claimed as dealings through selling agency were not liable to tax.

Final Conclusion: The assessments were set aside to the extent they taxed the disputed transactions, and the petitions succeeded.

Ratio Decidendi: In a tax assessment, the Department must first establish that the disputed transaction falls within the charging provision before the statutory burden shifts to the dealer to prove exemption or non-liability.

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