Machinery provision for declared goods tax upheld as valid burden-shifting rule against evasion.

Section 6-A(2) of the Karnataka Sales Tax Act was treated as a machinery and evidentiary provision, not a charging section. The burden on the dealer to prove that declared goods had already suffered tax was upheld as a reasonable device to ensure effective collection and prevent evasion. The Court also found that a remote risk of double taxation in exceptional cases did not invalidate the provision, and that it did not authorise taxation at more than one point contrary to section 15(a) of the Central Sales Tax Act because the statutory presumption could be rebutted by proof of prior tax liability.

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Issues: Whether section 6-A(2) of the Karnataka Sales Tax Act, in relation to declared goods, was unconstitutional as violating Article 19(1)(g) of the Constitution of India and inconsistent with section 15(a) of the Central Sales Tax Act, 1956.

Analysis: Section 6-A(2) was treated as a machinery provision and a rule of evidence, not as a charging provision. The burden placed on the dealer to show that the goods had already suffered tax was held to be a reasonable legislative device to make the tax effective and prevent evasion. The Court distinguished cases dealing with defective charging provisions and held that a remote possibility of double taxation in rare cases would not invalidate the provision. It also held that the provision did not permit taxation at more than one point in the sense prohibited by section 15(a), because the dealer could displace the statutory presumption by showing prior liability to tax.

Conclusion: Section 6-A(2) was held to be valid and not violative of Article 19(1)(g) or section 15(a) of the Central Sales Tax Act, 1956.

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