Rules made under a Statute are legitimate aid for construction of statute as

(1) Contemporanea Expositio. After an Act is passed, the department which has to implement the Act understands it in its own way. Often, circulars and trade notices are issued. These are issued on the basis of their understanding of the law and the interpretation stated in the circular/trade notice is called 'Contemporanea Expositio'. This means 'contemporary exposition. "Contemporanea expositio est optima et fortissima in lege'-Best the surest mode of construing an instrument is to read it in the sense which would have been applied when it was drawn up the principle states that Courts in interpreting the statute will give much weight to the interpretation put upon it at the time of enactment by those whose duty was to construe, execute and apply the said enactment.-K.P. Varghese Vs. ITO (1982) 1 SCR 629 = (1981) 131 ITR 597 (sq = AIR 1981 SC 1922-reiterated in CCE, Guntur Vs. Andhra Sugar Ltd. (1989) 1 CLA 130 (sq = 1988 (38) ELT 564 (sq = 1989 (Supp) 1 sec 144 = 1989 (19) ECC 46 (sq. "'Indian
Metal and Ferro Alloys Ltd. Vs. CCE-1991 (51) ELT 165 (SC) 1028 = JT (1990) 4 se 763-followed in CCEVs. HMM Ltd.-1993 (67) ELT 436 (CECA T-5 member bench order). Interpretation accepted and acted upon for a long time should not be altered unless there are compelling reasons to do so.
In Indian Metals and Ferro Alloys Ltd. Vs. CCE-1991 (51) ELT 165 (sq, it was held that a contemporaneous exposition by the administrative authorities is a useful guide to the interpretation of the expression used in statutory instrument. SC in Deslzbandhu Gupta Vs. Delhi Stock Exchange 1979 (3) SCR 373 = AIR 1979 SC 1049 = (1979) 50 Compo Cas 84 (sq held: "Contemporaneous Construction placed by the administrative or Executive Officers charged with execufmg the statute, though not controlling, is nevertheless entitled to considerable weight as highly persuasive. However, if interpretation is found to be erroneous, Court would refuse to follow such construction. Its application is restricted to 01..1 legislation and not to a recent statute in first few years of its enforcement." In State of Tamilnadu Vs. Malzi Traders-(1989) 73 STC 228 (sq, it
. was held that contemporaneous exposition of administrative authorities is a very useful and relevant guide. Such interpretation should be overruled only if shown to be clearly wrong. In Municipal corporation ofPune Vs. Blzarat Forge Co. Ltd.-(1995) 3 sec 434 (3-member bench), it was observed that principle of 'Contemporanea Expositio' is not decisive or controlling the question of construction. It has only persuasive value. In clear case of error, Courts would refuse to follow such construction.
Rules made under a Statute are legitimate aid for construction of statute as 'Contelllporanea Expositio' -P Knslingam V s. PSG College ofTecl1l1ology-1995(2) SCALE 387 = AIR 1995 SC 1395.
Thus, CBDT (Central Board of Direct Taxes) had issued circulars in 1972 that Section 194-C regarding deduction of income-tax at source is applicable to only works contract and not labour contracts. The circular also clarified that the provisions of TDS will not apply to supply of material and contracts for rendering professional services by lawyers, physicians, surgeons, accountants, consultants, etc. However, suddenly, CBDT issued a fresh circular dt. 8th March, 1994/ stating that the section is applicable to all service contracts, transport contracts etc. It was clarified in the circular that the provisions of Section 194-C will apply to all payments to professionals, advertising agents and transport contractors. It was hold that principle of Contemporanea Expositio is applicable and the Department cannot suddenly change an interpretation which it has been consistently following since 1972-Chamber of Income- Tax Consultants V s. CBDT
(1994) 209 ITR 660.