Opinion of the Advocate General — ECLI:EU:C:2003:319
Date: 2003-06-03
Language of the case: Italian
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation
Procedure: Action for failure to fulfil obligations - successful
Origin: Italy

Summary of the Judgment 
1. Member States — Obligations — Failure to fulfil obligations — Liability — 
Extent — Constitutionally independent institutions 
(Art. 226 EC) 
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SUMMARY — CASE C-129/00 
2. Actions for failure to fulfil obligations — Examination of the merits by the Court — 
Assessment of the scope of the provisions impugned — Taking into account of the 
interpretation by the courts of the Member State in question — Criteria 
(Art. 226 EC) 
3. Community law — Direct effect — National charges incompatible with Community 
law — Repayment — Arrangements — Application of national law — Mainten­
ance by a Member State of legislation whose construction by case-law and adminis­
trative practice makes exercise of the right to repayment excessively difficult — Failure 
to fulfil obligations 
1. A Member State's failure to fulfil 
obligations may, in principle, be estab­
lished under Article 226 EC whatever 
the agency of that State whose action 
or inaction is the cause of the failure to 
fulfil its obligations, even in the case of 
a constitutionally independent institu­
tion. 
(see para. 29) 
2. For the purposes of an action, under 
Article 226 EC, for a declaration of a 
Member State's failure to fulfil obli­
gations, the scope of national laws, 
regulations or administrative provi­
sions of that Member State must be 
assessed in the light of the interpre­
tation given to them by national courts. 
In that regard, isolated or numerically 
insignificant judicial decisions in the 
context of case-law taking a different 
direction, or still more a construction 
disowned by the national supreme 
court, cannot be taken into account. 
That is not true of a widely-held 
judicial construction which has not 
been disowned by the supreme court, 
but rather confirmed by it. 
Where national legislation has been the 
subject of different relevant judicial 
constructions, some leading to the 
application of that legislation in com­
pliance with Community law, others 
leading to the opposite application, it 
must be held that, at the very least, 
such legislation is not sufficiently clear 
to ensure its application in compliance 
with Community law. 
(see paras 30, 32-33) 
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COMMISSION v ITALY 
3. A Member State fails to fulfil its Treaty 
obligations if it maintains in force 
legislation relating to the repayment 
of indirect charges levied in breach of 
Community rules, which excludes such 
repayment if the charges have been 
passed on to third parties and which is 
construed and applied by the adminis­
trative authorities and a substantial 
proportion of the courts, including the 
national supreme court, in such a way 
that the exercise of the right to repay­
ment is made excessively difficult for 
the taxpayer, because 
— the reasoning deployed by the case-
law in question is based on a premiss 
which is a mere presumption, 
namely that indirect taxes are in 
principle passed on by subsequent 
sales by economic operators where 
they have the chance; 
— the failure to produce the account­
ing documents of the undertaking 
seeking the repayment is, by itself, 
sufficient for it to be presumed that 
those charges have been passed on 
to third parties; 
— the authorities consider that the 
passing on of a charge is established 
if the amount thereof has not been 
accounted for, from the year of its 
payment, as a payment to the public 
purse for undue tax, and credited as 
an asset in the balance-sheet of the 
undertaking. 
(see paras 35, 37-39, 41, operative part) 
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