Burden of proof under single-point sales tax notifications lies on revenue to show the taxable exception applies.

Where medicines and pharmaceutical preparations were subjected to a single-point levy only at the point of sale by the importer or manufacturer under a notification issued under section 3-A of the U.P. Sales Tax Act, the revenue had to prove that the transaction fell within that taxable exception. Once the goods were covered by the notification, they stood outside the general charging provision unless the department established import by the assessee or sale by the manufacturer or importer. The burden therefore did not lie on the dealer to disprove import, and liability could arise only on proof of the notified taxable category.

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Issues: Whether, where medicines and pharmaceutical preparations were made taxable only at the point of sale by the manufacturer or importer under a notification issued under section 3-A, the burden lay on the dealer to prove local purchase so as to exclude import, or on the department to prove that the goods had been imported.

Analysis: Section 3 of the U.P. Sales Tax Act, 1948 was the charging provision, but section 3-A empowered the State Government to create a single-point levy by notification in respect of specified goods. The notification covering medicines and pharmaceutical preparations excluded such turnover from tax except at the point of sale by the importer or manufacturer. Once the goods were held to fall within that notification, the sale was outside the general charging provision and liability could arise only if the department established that the sale was one by the importer or manufacturer. In that setting, the burden did not rest on the dealer to negative import.

Conclusion: The burden lay on the department to prove that the tincture had been imported by the assessee. The question was answered in favour of the assessee.

Ratio Decidendi: Where a taxing notification creates a specific exception or single-point levy for identified goods, the revenue must prove the facts bringing the transaction within the taxable exception.

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