The policemen applying for amnesty for the murder of the Cradock Four in 1985 claim that Mhlauli was a known activist.
But George Bizos SC, representing the families of Mhlauli and the other victims, on Tuesday produced a welter of evidence that showed the Oudtshoorn, Western Cape headmaster might have been killed because he happened to be travelling with Matthew Goniwe, Sparrow Mkonto and Fort Calata when they were stopped by the police death squad.
Bizos told former Lieutenant Eric Alexander Taylor he was telling the Truth and Reconciliation Commission's amnesty committee a pack of lies about his motive for killing Mhlauli.
Taylor told the committee he had received numerous reports from informers about Mhlauli's movements in the Eastern Cape. He said he was told Mhlauli had close links with Goniwe and was planning to import resistance politics to the South Western Districts.
When asked by Bizos if he conveyed that information to his headquarters in Port Elizabeth, Taylor said he had done so on several occasions. He also claimed that he passed on the information to the Oudsthoorn security police.
"If you are saying that then it is my sad duty to tell you that you are committing perjury in this committee," Bizos told Taylor.
Bizos produced an official police document which showed that Mhlauli was not known to police headquarters in Port Elizabeth.
Taylor at first appeared stunned by the revelation, but then suggested that the document had been drawn up by the uniform branch and not the security police.
Bizos said: "I knew you were going to say that." He told Taylor to read the last paragraph which clearly stated the report had been drawn up in conjunction with the security police.
Bizos put it to Taylor that he was willing to tell even more lies to hide his real motive for killing Mhlauli.
Taylor conceded there was a discepancy of his assessment of Mhauli and that of his headquarters, and said he was at a loss to explain it.
He insisted he had received information which indicated that Mhlauli was a political agitator.
Taylor's application for amnesty requires that he makes a full disclosure about his deeds and provides a political motive for his actions.
A finding by the committee that Mhlauli was an innocent victim in the attack would have a major effect on Taylor's request for amnesty.
Bizos also produced evidence which showed Mhlauli moved to Oudtshoorn because he was unhappy with the turbulence taking place at the schools in the Eastern Cape.
On the night he was killed, he left Oudtshoorn when his school closed and was travelling to Cradock with Goniwe, Calata and Mkonto.
According to a report placed before the committee, Mhlauli's parents and grandparents lived in Cradock and he was returning for the July holidays.
He had known Goniwe, who was also a teacher, for many years since growing up together in Cradock.
Taylor also had difficulty explaining his motives for killing Goniwe, who appeared to have been an excellent teacher in Cradock.
When asked by Bizos to comment on reports that Goniwe insisted on children being on time for school, discouraged smoking and visiting shebeens and condemned the burning of schools, Taylor said he could not deny this.
Taylor explained that it was his after-hours activities that concerned the police.
"He urged children to be organised and struggled for human rights for blacks. Did you find anything threatening in that?" Bizos asked.
Taylor was asked by committee chairman Judge Ronnie Pillay and committee member Denzil Potgieter if he believed it was wrong for blacks to strive for human rights.
Taylor said at the time he perceived the demand for human rights as a threat to the existing political order.
Pillay said the quest for human rigts went to the heart of the struggle that was being waged at the time.
Taylor said he knew now it was wrong to oppose the people in their struggle for human rights. However, he said he had been indoctrinated to believe that he was fighting against forces aimed at overthrowing the government of the day.
Taylor is one of seven policemen applying for amnesty for the murder of the Cradock Four in June 1995. The other six are Johan Martin van Zyl, Nic Janse van Rensburg, Gerhardus Lotz, Hermanus Barend du Plessis, Harold Snyman and Eugene de Kock.
The hearing continues on Tuesday with testimony by Lotz.