Opinion of the Advocate General — ECLI:EU:C:1999:156
Date: 1999-03-18
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Action for failure to fulfil obligations - successful
Origin: Spain

Summary of the Judgment 
1. Actions for failure to fulfil obligations — Pre-litigation procedure — Whether the 
Member State is required at that point to raise all its pleas in law — No such obligation 
(EC Treaty, Art. 169 (now Art. 226 EC)) 
2. Member States — Obligations — Failure to fulfil obligations — Justification put 
forward — Interests of public safety — Whether acceptable — Conditions 
(EC Treaty, Arts 36, 48, 56 and 223 (now, after amendment, Arts 30 EC, 39 EC, 46 
EC and 296 EC) and Arts 169 and 224 (now Arts 226 EC and 297 EC)) 
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SUMMARY — CASE C-414/97 
3. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Option for the Member States to maintain certain exemptions on a 
transitional basis — Scope — Introduction of new exemptions — Not permissible 
(Council Directive 77/388, Art. 28(3)(b)) 
4. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Exemptions provided for by the Sixth Directive — Exemption of 
certain operations relating to warships and aircraft referred to in points 23 and 25 of 
Annex F — Extension to military equipment — Not permissible 
(Council Directive 77/388, Art. 28(3)(b), and Annex F, points 23 and 25) 
1. It would be contrary to the general 
principle of respect for the rights of the 
defence to require all pleas in law put 
forward by a Member State in its 
defence in proceedings under Arti­
cle 169 of the Treaty (now Article 226 
EC) be raised during the pre-litigation 
procedure. Once the subject-matter has 
been defined, the Member State has the 
right to raise all the pleas available to it 
in order to defend itself, there being no 
rule of procedure requiring it to put 
forward all the arguments in its defence 
during the pre-litigation procedure. 
2. The only articles of the Treaty which 
provide for derogations in situations 
which may involve public safety are 
Articles 36, 48, 56, and 223 (now, after 
amendment, Articles 30 EC, 39 EC, 46 
EC and 296 EC) and Article 224 (now 
Article 297 EC), which deal with 
exceptional and clearly defined cases 
and which, because of their limited 
character, do not lend themselves to a 
wide interpretation. 
Accordingly, it is for the Member State 
which seeks to rely on those excep­
tions, in justification of its failure to 
fulfil obligations, to furnish evidence 
that the exemptions in question do not 
go beyond the limits of such cases. 
3. A Member State which, in implemen­
tation of Sixth Directive 77/388 on the 
harmonisation of the laws of the 
Member States relating to turnover 
taxes, has made VAT payable on cer­
tain operations cannot then, in exempt­
ing those activities from VAT, claim 
that it is entitled to do so in exercise of 
the option provided for by Arti­
cle 28(3)(b) of the Sixth Directive, 
under which the operations listed in 
Annex F thereto may continue to 
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COMMISSION V SPAIN 
benefit from exemption for a transi­
tional period. 
4. Article 28(3)(a) of Sixth Directive 
77/388 on the harmonisation of the 
laws of the Member States relating to 
turnover taxes — inserted therein by 
Directive 91/680 — which authorises 
the Kingdom of Spain to exempt from 
VAT the activities set out in paragraphs 
23 and 25 of Annex F, that is to say, 
certain operations relating to aircraft 
and warships, being an exception, is to 
be interpreted strictly. By exempting 
from VAT intra-Community imports 
and acquisitions of arms, ammunition 
and equipment exclusively for military 
use, other than those related to the 
aircraft and warships, that Member 
State fails to fulfil its obligations under 
the Directive. 
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