How can a bloke selling guns over the counter have any way of knowing that someone buying the gun is 'of sound mental state'.

The presumption ought to be that they are not unless there is solid proof that they are. And that is not an easy thing to prove for any of us. Just the fact they might never have been sectioned is nowhere near good enough. You'd need references from guaranteed sources at the very least.

As for online sales there is no way these can ever ensure an adequate level of proof.

It should be the same level of proof as there would be to allow someone to adopt a child.