Explain the following terms in the context of interpretation of tax treaties: (i) Principle of Contemporanea Expositio (ii) Teleological…

(i) Principle of Contemporanea Expositio A treaty's terms are normally to be interpreted on the basis of their meaning at the time the treaty was concluded. However, this is not a universal principle. In Abdul Razak A. Meman's (2005) 276 ITR 306, the AAR observed that "there can be little doubt that while interpreting treaties, regard should be had to material contemporanea expositio. This proposition is embodied in article 32 of the Vienna Convention and is also referred to in the decision of the Hon'ble Supreme Court in K. P. Varghese v. ITO [1981] 131 ITR 597. (ii) Teleological Interpretation In this approach the treaty is to be interpreted so as to facilitate the attainment of the aims and objectives of the treaty. This approach is also known as the 'objects and purpose' method. In case of Union of India v. Azadi Bachao Andolan 263 ITR 706, the Supreme Court observed that “the principles adopted for interpretation of treaties are not the same as those in interpretation of statutory legislation. The interpretation of provisions of an international treaty, including one for double taxation relief, is that the treaties are entered into at a political level and have several considerations as their bases." One instance is where the Apex Court agreed with the contention of the Appellant that “the preamble to the Indo-Mauritius DTAA recites that it is for 'encouragement of mutual trade and investment' and this aspect of the matter cannot be lost sight of while interpreting the treaty.