Processed vegetables classification prevails for ginger and garlic paste, avoiding higher tax under the unscheduled goods provision.

Ginger paste and garlic paste were treated as processed vegetables under entry No. 3 of the Third Schedule to the Karnataka Value Added Tax Act, 2003, because ginger is understood in common parlance as a vegetable and the absence of an express mention of the pastes did not require classification as masala products. The correct approach was to identify the closest proximate entry in the schedules, and the vegetable entry prevailed over the unscheduled goods provision. Accordingly, the products were not taxable at the higher rate under section 4(1)(b), and the assessee's classification was accepted.

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Issues: Whether ginger paste and garlic paste are classifiable under entry No. 3 of the Third Schedule to the Karnataka Value Added Tax Act, 2003 as processed vegetables, or whether they fall under section 4(1)(b) of the Act as unscheduled goods taxable at a higher rate.

Analysis: Entry No. 3 of the Third Schedule covers all processed fruit and vegetables, including specified allied products. Ginger is judicially recognised as a vegetable in common parlance, and the non-mention of ginger paste or garlic paste in the schedules did not justify treating them as masala products merely because they may be used in food preparation. The proper approach was to identify the closest proximate entry, and the court held that the vegetable entry, not the masala entry, was the correct classification.

Conclusion: Ginger paste and garlic paste fall within entry No. 3 of the Third Schedule and are not taxable at 12.5 per cent under section 4(1)(b); the assessee succeeded.

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