Common parlance test for "vegetable" excludes processed canned mushrooms from GTA service tax exemption

The expression "vegetable" in a taxing exemption must be construed in common parlance, not in a technical or botanical sense. Fresh green vegetables ordinarily sold in the market are distinct from mushrooms that have been boiled, preserved, canned, labelled and packed, because such processing creates a commercially different commodity. Since the exemption was intended to protect perishable goods in transit, processed canned mushrooms fall outside that category. The notification therefore did not extend to GTA service used for transporting canned mushrooms, and exemption from service tax was denied.

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Issues: Whether canned mushrooms, being processed mushrooms, could be treated as vegetables for the purpose of exemption from service tax on Goods Transport Agency service under Notification No. 33/04 dated 03.12.2004.

Analysis: The expression "vegetable" in a taxing statute was held to be understood in common parlance and not in a technical or botanical sense. Fresh green vegetables, as ordinarily sold in the market, are distinct from mushrooms that have undergone processing such as boiling, addition of preservatives, canning, labelling and packing. The purpose of the exemption was to protect perishable commodities in transit, and processed canned mushrooms were held to have moved out of that category. The processing transformed the goods into a commercially different commodity, so the benefit of the exemption notification could not be extended.

Conclusion: Canned mushrooms are not vegetables for the purpose of the notification, and the denial of exemption from service tax on GTA service was upheld.

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