Sales tax burden of proof: taxing authority must prove levy ingredients, while dealer proves only exemption or special facts.

Section 6 of the Mysore Sales Tax Act, 1957 was construed as a charging provision that applies only when its statutory conditions are satisfied, and the proviso excludes goods already covered by specified schedules. The burden of proving the ingredients necessary to attract tax liability remains on the taxing authority; section 6-A(1) requires the dealer to prove only exemption or special facts within his knowledge, including where section 106 of the Evidence Act applies. An assessment made without a proposition notice and without findings on the ingredients of liability was held unsustainable on the record.

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Issues: (i) Whether section 6 of the Mysore Sales Tax Act, 1957 is a charging provision and how its conditions and proviso operate; (ii) whether section 6-A(1) shifts the burden of proving the ingredients necessary to attract tax liability onto the dealer or merely requires the dealer to prove exemption or special facts within his knowledge; (iii) whether an assessment order levying tax under section 6 without issuing a proposition notice and without recording findings on the ingredients of liability can stand.

Issue (i): Whether section 6 of the Mysore Sales Tax Act, 1957 is a charging provision and how its conditions and proviso operate.

Analysis: Section 6 was construed as a charging provision attracting tax only when the statutory conditions are satisfied, namely that taxable goods are purchased in business in circumstances where no tax is leviable at the sale point, and the dealer either consumes, otherwise disposes of, or despatches the goods outside the State. The proviso was treated as an exemption clause excluding goods covered by the Fourth Schedule and certain goods in the Second Schedule already subjected to tax. The section was therefore held to impose liability only within its defined scope and subject to the express exclusions.

Conclusion: Section 6 is a charging provision operating only upon fulfilment of its stated conditions and subject to the proviso's exemptions.

Issue (ii): Whether section 6-A(1) shifts the burden of proving the ingredients necessary to attract tax liability onto the dealer or merely requires the dealer to prove exemption or special facts within his knowledge.

Analysis: The burden of proving the ingredients that justify taxation was held to lie on the taxing authority. Section 6-A(1) was interpreted as not relieving the department of that basic burden. It applies when a dealer claims that a transaction or turnover is not liable to tax and must then establish the facts supporting exemption. Special facts exclusively within the dealer's knowledge may also attract the rule in section 106 of the Indian Evidence Act, 1872. The challenge to section 6-A(1) failed because, on this construction, the provision was not unreasonable.

Conclusion: The burden of proving the essential ingredients for levy remains on the taxing authority, while the dealer bears the burden only for exemption or special facts within his knowledge; the challenge to section 6-A(1) was rejected.

Issue (iii): Whether an assessment order levying tax under section 6 without issuing a proposition notice and without recording findings on the ingredients of liability can stand.

Analysis: The assessment order challenged in one petition was passed straightaway without a proposition notice and without clear findings establishing the ingredients attracting liability under section 6. That procedural and factual deficiency meant the levy could not be sustained on the record before the Court. In the remaining matters, the petitioners had an alternative appellate remedy under section 20 and, since their challenge to the validity of section 6-A(1) failed and they were not pressing the challenge to section 6, the writ petitions were not entertained on merits.

Conclusion: The assessment order in the one petition was quashed, while the other writ petitions were dismissed with relegation to the statutory appellate remedy.

Final Conclusion: The judgment upheld the substantive validity of the burden-of-proof rule as construed, but granted relief only where the assessment order was procedurally unsustainable for want of notice and findings; the remaining matters were left to the statutory appellate forum.

Ratio Decidendi: A sales tax charging provision must be strictly applied only after the department proves the statutory ingredients for levy, while the assessee bears the burden only for exemption or facts peculiarly within his knowledge.

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