6.  The applicant is registered under Hungarian law as a cooperative based in Aranyosgadány.
7.  The applicant’s aim is to support its members in their agricultural activity, in particular by purchasing expensive machines and lending them to its members free of charge. The members pay a regular “contribution fee” to the cooperative.
8.  The applicant considered that the lending of machines constituted the very essence of its economic activities. It therefore deducted the value-added tax paid in respect of the machines from the tax which it was liable to pay.
9.  In 2008 the Hungarian Tax Authority fined the applicant, having found that the lending of machines to members free of charge was not an “economic activity” within the meaning of Act no. LXXIV of 1992 on Value-Added Tax. As a consequence, the applicant was not entitled to deduct the tax paid on the goods it purchased.
10.  The applicant challenged the decision of the Tax Authority before the administrative courts. Pointing to the special provisions applying to cooperatives and to the fact that its members paid contribution fees, it argued, on the basis of domestic law, that the service in question was to be considered a genuine economic activity.
11.  On 17 February 2009 the Baranya County Court upheld the administrative decision. The Supreme Court, in review proceedings, upheld that judgment on 26 November 2009. In response to the applicant’s argument to the effect that the contribution fee paid by members should be taken into account as a “consideration” for the lending of machines, rendering the applicant’s activity an “economic” one, the Supreme Court referred to the Aardappelenbewaarplaats judgment of the CJEU (C-154/80, EU:C:1981:38), in which that court had held that “a provision of services for which no definite subjective consideration is received does not constitute a provision of services ‘against payment’ ”.
12.  On 9 December 2010 the applicant, represented by a different lawyer from the one who had represented it in the previous set of proceedings, introduced a second set of proceedings, seeking damages against the Supreme Court before the Budapest Regional Court. It alleged that the Supreme Court had violated European Union law on account of its failure to apply, of its own motion, Article 17 of the Sixth Council Directive 77/388/EEC (see paragraph 30 below) in its 2009 judgment and on account of the wrongful qualification of the applicant’s activity for the purposes of the value-added tax deduction. The applicant argued that the European Union law provision analysed in the Aardappelenbewaarplaats case was Article 8 of the Second Council Directive 67/228 (defining the basis for assessment of value-added tax), rather than Article 17 of the Sixth Council Directive 77/388/EEC (concerning tax deduction). It was the latter that should have been directly applicable in the case before the Supreme Court. In the applicant’s view, the Aardappelenbewaarplaats case was about whether turnover tax should be imposed on storage services provided free of charge for members of a cooperative association, whereas the case before the Supreme Court had concerned a different question, namely the deductibility of input VAT. Alleging the Supreme Court’s liability for judicial malpractice, the applicant relied on the Köbler judgment of the CJEU (see paragraph 31 below). It requested that the Budapest Regional Court obtain a preliminary ruling from the CJEU as to the conformity of the Supreme Court’s judgment with European Union law and the conditions for establishing whether the Supreme Court might be liable for a wrongful judgment.
13.  On 31 May 2011 the Budapest Regional Court rejected the applicant’s claim against the Supreme Court. It held that in the main proceedings, the Supreme Court had been bound by the applicant company’s claim taking issue only with the alleged absence of a “consideration” and the resulting qualification of its service as not being an “economic activity”. The Regional Court was of the view that in that respect the Supreme Court had duly examined the relevant European Union law of its own motion.
14.  Without requesting a preliminary ruling, the Budapest Regional Court held that the Köbler judgment was not relevant in the case because the applicant had sought to sue the Supreme Court on the basis of the Hungarian Civil Code, rather than seeking to sue the Hungarian State itself under European Union law.
15.  The applicant appealed and requested the second-instance court to obtain a preliminary ruling also on the question of whether the Köbler principles were applicable if the reparation claim was directed against the Supreme Court and not the State.
16.  On 28 August 2012 the Budapest Court of Appeal upheld the first-instance judgment, without requesting a preliminary ruling. It accepted the applicant’s argument that the reasoning of the first-instance judgment was erroneous with respect to the alleged irrelevance of the Köbler case, but held that, in any event, the applicant’s claim was ill-founded on other grounds. Notably, it pointed to the fact that during the first set of proceedings (see paragraph 10 above) the applicant had failed to refer to European Union law, and considered that this fact in itself had rendered the applicant’s claim unfounded.
17.  Arguing that European Union law was to be applied proprio motu, even without an explicit reference from the plaintiff, the applicant requested a review of the final judgment by the Kúria (the historical appellation by which the Supreme Court was renamed in 2012, see the first sentence of point 36 of the Constitutional Court’s decision cited in Baka v. Hungary [GC], no. 20261/12, § 55, ECHR 2016). It also reiterated its request that the case be referred for a preliminary ruling and proposed that the Kúria also ask whether the liability of a State under the Köbler principles may be subjected to the precondition that an explicit reference to the relevant provisions of European Union law must be made by the plaintiff in the main – in the present case first – proceedings.
18.  The questions thus proposed by the applicant for the purposes of a preliminary ruling read as follows:
“1.  Does the reparation claim fall within the scope of European law in civil proceedings, such as actions in damages based on section 349 of the Hungarian Civil Code, brought by an individual against the Supreme Court of the Member State concerned, in which the plaintiff claims that the Supreme Court has violated a right conferred on him by a directly applicable provision of European law in previous administrative proceedings. If so, to what extent? 2.  In the common system of value-added tax, with regard to the specificities thereof, may Council Directive 77/388/EEC, especially its Article 17(2)(a), be interpreted as meaning that a national measure (e.g. a judgment) is incompatible with it if it denies the right of a cooperative, otherwise subject to value-added tax in the Member State concerned, to deduct input VAT paid on machines purchased, for the sole reason that the cooperative handed over those machines to its members, a ‘grouping of growers’, without consideration? 3.  Is the liability of a Member State’s Supreme Court excluded, under the rules of European law, by the sole fact that an individual did not allege explicitly the infringement of a specific provision of European law in the judicial proceedings for the review of an administrative decision denying him the right to tax deduction? Or should the domestic court enforce of its own motion the directly applicable provision of European law (in this case, Article 17(2)(a) of the Sixth Directive)? 4.  Is the infringement sufficiently serious if the Supreme Court of a Member State denies, in administrative proceedings, an individual’s right to tax deduction without analysing the underlying provision of European law directly or referring the case for a preliminary ruling, in circumstances where the reasoning of the refusal to refer the case [to the CJEU] is based on the Supreme Court’s reliance on a judgment of the [CJEU] adopted on a different subject and where this latter court has not yet adopted a ruling on the issue at hand?”
19.  On 2 October 2013 the Kúria dismissed in a procedural order (végzés) the applicant’s request for a preliminary ruling. Firstly, it noted that it was not in dispute between the parties that the case fell within the scope of European Union law; the referral of the first question would therefore have been futile. Secondly, concerning the second, third and fourth questions, the Kúria held that they could have been considered in the first proceedings, but that they fell outside the scope of the action in damages brought against the Supreme Court on account of alleged judicial malpractice. It further held that in the framework of the action in damages, assessment of the consequences of the applicant’s failure, in the first set of proceedings, to make explicit allegations of an infringement of European Union law (see question 3 quoted in paragraph 18 above) was the task of the national courts, and that it did not raise any question of interpretation that would fall under the jurisdiction of the CJEU.
20.  The applicant complained to the Kúria about the above refusal but in vain; on 4 December 2013 it held, in a procedural order (végzés), that no appeal lay against such a decision.
21.  On 11 December 2013 the Kúria upheld, in a judgment (ítélet), the final decision of the Budapest Court of Appeal. It reiterated that the applicant could have relied on the Sixth Council Directive and put forward its arguments concerning the allegedly correct interpretation of domestic law in the light of European Union law before the Supreme Court in the 2009 proceedings. Since the applicant had failed to do so, the Supreme Court had indeed been prevented, by force of the applicable procedural rules, from examining such arguments as raised in the subsequent proceedings for damages, concerning the compatibility of the final judgment of 2009 with European Union law. Therefore, the Supreme Court could not bear responsibility for the infringement of European Union law alleged by the applicant. The judgment of the Kúria was served on the applicant on 7 February 2014.
22.  On 13 March 2014 the applicant lodged a constitutional complaint under section 27 of the Constitutional Court Act (see Mendrei v. Hungary (dec.), no. 54927/15, § 13, 19 June 2018), claiming that the proceedings before the Kúria had been unfair on account of the latter’s allegedly arbitrary refusal to refer the case for a preliminary ruling. Contending that the Constitutional Court should be considered as a “court or tribunal” for the purposes of Article 267 of the TFEU, the applicant also requested the Constitutional Court to turn to the CJEU in order to enquire whether an “arbitrary” refusal of a last-instance jurisdiction to refer a case for a preliminary ruling may violate the party’s right to a fair trial guaranteed by Article 47 of the Charter of Fundamental Rights of the European Union (see paragraph 29 below) and, if so, under what conditions such a refusal might be considered arbitrary. The applicant argued, in particular, that the Kúria had failed to recognise an issue of fundamental importance, namely that whether a certain legal issue (the consequences of a plaintiff’s failure to put forward explicit allegations as to an infringement of European Union law) fell within the ambit of national law or European Union law was itself a question belonging necessarily to the realm of European law. Ignoring that concept, the Kúria had “solved” the problem in an arbitrary fashion, that is, by refusing the reference and barring the applicant’s access to a “lawful judge”, the CJEU in the circumstances.
23.  The applicant’s constitutional complaint contained the following passages:
“The complainant ... does not want to call into question the merits of the Kúria’s impugned judgment in the present procedure [but rather complains that] the Kúria acted unfairly in the review proceedings ...
The Kúria’s procedure was in breach of the claimant’s constitutional right to a fair trial, guaranteed by Article XXVIII (1) of the Fundamental Law, in so far as the Kúria acted arbitrarily in omitting to refer the case for a preliminary ruling. ...
The Kúria failed to explain, in line with the Cilfit requirements ... why and how it had deemed itself exempt from the obligation to refer a question [on the interpretation of EU law to the CJEU for a preliminary ruling]. ...
[I]n the light of the above, the Kúria failed to comply with its obligation to refer [a question to the CJEU for a preliminary ruling] and that in an arbitrary, grossly unprofessional manner ...”
24.  On 19 May 2014 the Constitutional Court rejected the constitutional complaint as inadmissible, without putting forward a preliminary ruling request (see decision no. 3165/2014. (V.23.), referred to in Somorjai v. Hungary, no. 60934/13, § 34, 28 August 2018). It held that the question whether a request for reference to the CJEU should be made or not was to be decided by the judges hearing the case in the ordinary courts, and that the Constitutional Court lacked jurisdiction to review such decisions. It further noted that the only claim an applicant might make in constitutional complaint proceedings initiated under section 27 of Act no. CLI of 2011 on the Constitutional Court was that a judgment be quashed. Consequently, no request for a preliminary ruling was possible under that law, and the applicant’s request to that effect had to be rejected.
25.  The Constitutional Court’s decision contained the following passage:
“[The applicant] was of the view that the rejection by the Kúria of his request to have the case referred to the [CJEU] had been arbitrary in that the Kúria should have provided professionally appropriate, objective and duly detailed reasons in that respect but, in the applicant’s opinion, it had failed to do so. In that connection, the applicant referred to the requirements contained in the [CJEU]’s Cilfit and Köbler judgments ...”
Apart from that passage, the decision did not address the issue of adequate reasoning by the Kúria.
26.  Certain provisions concerning the Constitutional Court’s power of review in connection with constitutional complaints were set out in Mendrei (cited above, §§ 12-15).
Section 43 of the Constitutional Court Act, which was not quoted in Mendrei (cited above), provides as follows:
“(1)  If the Constitutional Court, in the course of proceedings provided for in section 27 and on the basis of a constitutional complaint, declares that a judicial decision is contrary to the Fundamental Law, it shall quash the decision.
(2)  Provisions of Acts that contain regulations in respect of court proceedings shall be applied to the procedural consequence of a Constitutional Court decision that quashes a judicial decision.
(3)  In court proceedings conducted as a consequence of the quashing of a judicial decision by the Constitutional Court, the decision of the Constitutional Court as to the constitutional issue shall be adhered to.
(4)  The Constitutional Court, when it quashes a judicial decision, may also quash judicial decisions or the decisions of other authorities which were reviewed by the given decision.”
27.  The provisions of the old Code of Civil Procedure (Act no. III of 1952) pertaining to the reference for a preliminary ruling, as in force at the material time, were set out in Somorjai, cited above, §§ 28 and 36.
Article 361 of the old Code of Civil Procedure provided as follows:
“In order to provide redress following a constitutional complaint, the Kúria shall decide as follows: ...
(c)  if the Constitutional Court has quashed a judicial decision, [the Kúria] shall ... remit the case to the first or second-instance court for new proceedings and a new decision; or order the adoption of a new decision in respect of an application for review.”
28.  The relevant European Union law and the case-law of the CJEU pertaining to the preliminary ruling procedure was outlined in, among other authorities, Somorjai (cited above, §§ 38-41) and Baydar v. the Netherlands (no. 55385/14, §§ 21-29, 24 April 2018).
29.  Article 47 of the Charter of Fundamental Rights of the European Union provides, in so far as relevant:
Right to an effective remedy and to a fair trial
“Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.
Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented. ...”
30.  Article 17(2)(a) of the Sixth Directive (Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes), as amended by Article 28f thereof, provides:
“In so far as the goods and services are used for the purposes of his taxable transactions, the taxable person shall be entitled to deduct from the tax which he is liable to pay:
(a) [VAT] due or paid within the territory of the country in respect of goods or services supplied or to be supplied to him by another taxable person; ...”
31.  In its Köbler judgment (C-224/01, EU:C:2003:513, point 1 of the operative part), the CJEU ruled as follows:
“The principle that Member States are obliged to make good damage caused to individuals by infringements of Community law for which they are responsible is also applicable where the alleged infringement stems from a decision of a court adjudicating at last instance where the rule of Community law infringed is intended to confer rights on individuals, the breach is sufficiently serious and there is a direct causal link between that breach and the loss or damage sustained by the injured parties. In order to determine whether the infringement is sufficiently serious when the infringement at issue stems from such a decision, the competent national court, taking into account the specific nature of the judicial function, must determine whether that infringement is manifest. It is for the legal system of each Member State to designate the court competent to determine disputes relating to that reparation.”
32.  In connection with the role of the national courts in application of European Union law, the CJEU held, among other things, as follows (see, respectively, joined cases C-430/93 and C-431/93 Van Schijndel, EU:C:1995:441, point 2 of the operative part; and C-2/06 Kempter, EU:C:2008:78, paragraph 45):
“Community law does not require national courts to raise of their own motion an issue concerning the breach of provisions of Community law where examination of that issue would oblige them to abandon the passive role assigned to them by going beyond the ambit of the dispute defined by the parties themselves and relying on facts and circumstances other than those on which the party with an interest in application of those provisions bases his claim.”
“[W]hile Community law does not require national courts to raise of their own motion a plea alleging infringement of Community provisions where examination of that plea would oblige them to go beyond the ambit of the dispute as defined by the parties, they are obliged to raise of their own motion points of law based on binding Community rules where, under national law, they must or may do so in relation to a binding rule of national law ...”