I.

However, in this case problems concerning the limits to be placed on the objection of illegality have arisen, for which the decisions of the Court to date do not provide any solution. They are the result of the attempt by the applicant to include in this case the Decision which was the subject-matter of Case 22/59, as well as general Decisions concerning the levies, which certainly influenced that individual Decision without, however, providing the legal foundation, in the sense of the Meroni judgment, of the Decision which is now contested. I will now examine these problems. In order to justify its action the applicant relies on the third paragraph of Article 36 of the Treaty, which permits an appeal against a pecuniary sanction or a periodic penalty payment imposed or ordered under the provisions of the Treaty, to be supported by an allegation that the decision or recommendation, which it is alleged has not been observed, is defective. Three questions of interpretation arise under this provision: (i) Are surcharges for delay in payment pecuniary sanctions? (ii) Does Article 36 refer to previous individual decisions or only to general decisions? (iii) What must the connection be between the decision imposing the sanction and the previous decision, which is alleged to be defective in the application challenging the decision imposing the sanction? First question: How is the concept of a pecuniary sanction to be understood in the system of the Treaty? According to the literal meaning there is a sanction when by reason of noncompliance with a legal obligation legal penalties are imposed. A pecuniary sanction exists when the penalty consists of the payment of a sum of money. On the other hand there is no sanction when an undertaking which has fallen into arrears with its payments is only obliged to repay the benefits arising from the unlawful retention of the amount payable (the benefit of the interest). It is clear that the surcharges for delay mentioned in the Treaty are not assessed in accordance with the latter example. According to Article 50 (3) of the Treaty surcharges of up to 5 % for each quarter's delay, that is, 20 % for each year's delay, can be imposed. Even when reduced to 1 % per month (12 % per year) by Decision No 3/52 the amount is still higher than the benefit normally obtained by retaining the capital sum concerned and from the point of view of the creditor covers more than the loss normally associated with delayed payment. The very amount of the surcharges for delay is thus an indication of their penal nature. But in addition to this there are other matters which must be considered: — The Treaty only fixes the maximum rate of the surcharges for delay in payment, so that there remains a discretionary power to determine the rate in particular cases and also the obligation to determine such rate having regard to the particular circumstances of each individual case (seriousness of the infringement). Moreover according to the text of the Treaty (Article 50 (3)) surcharges for delay can be imposed not only upon undertakings which fail to make a payment but generally upon undertakings which do not comply with decisions taken under this Article. In both cases the surcharges for delay are more in the nature of fines and periodic penalty payments than simple interest on overdue payments. — The general wording of the Treaty too justifies the assumption that the surcharges for delay in Article 50 must be regarded as pecuniary sanctions within the meaning of Article 36. The concept of pecuniary sanctions appears not only in Article 36 but also in Article 52, which deals with the transfers of funds derived from the levies, from pecuniary sanctions and periodic penalty payments, and also in Article 91 of the Treaty which confers upon the High Authority the right to suspend payment if an undertaking does not pay. a sum which it is inter alia liable to pay in discharge of a pecuniary sanction or periodic penalty payments imposed by the High Authority. In both cases it cannot be assumed that the surcharges in Article 50 are not intended to be covered. So the only remaining possibility is to describe them either as pecuniary sanctions or as periodic penalty payments. If we examine the text of the Treaty it must in addition be noted that, except in the case of fines and surcharges, the Treaty does not provide for any payments of money which can be regarded as pecuniary sanctions. When, however, certain provisions of the Treaty expressly refer only to fines (Articles 47, 54, 64, 65 (5), 66 (6), 68 (6)) the use of the wider concept of pecuniary sanctions in Article 36 can only mean that it also includes the surcharges for delay mentioned in Article 50. — Finally, in support of this view, reference can be made to national legislation, in particular national revenue law, which also recognizes the concept of a surcharge for delay in payment (see for example the German law relating to delays in payment of taxes of 13 July 1961, BGBl I, p. 891). With particular reference to the amount of the surcharges for delay in payment the general view is that, from the point of view of legal classification, the surcharges are not to be regarded as interest but as a means of compelling payment of the outstanding tax (see ‘Kommentar zur Reichsabgabenordnung’ by Becker-Riewald-Koch, 9th edition, Vol. I, pp. 821 et seq.). I do not therefore hesitate to apply the provisions of Article 36 and all their consequences to the surcharges mentioned in Article 50. Second question: Does Article 36 restrict the objection of illegality to previous general decisions or does it also, as the applicant considers to be correct, make it possible to argue that earlier individual decisions, which are not directly challenged, are defective? There is no doubt that the wording of the Treaty provides the applicant with a powerful argument in support of its view. Whereas other provisions of the Treaty refer expressly to general decisions, when references to them alone is intended, (the second paragraph of Article 33, Article 50 (2), Article 58 (2)) or to individual decisions when the Treaty only has them in mind, (the second paragraph of Article 15, the second paragraph of Article 33) and whereas in certain provisions of the Treaty a distinction is expressly made between special requests, that is, individual measures, and regulations, that is to say a body of rules of general application (Articles 65 (3) and 66 (4)), the third paragraph of Article 36 simply refers to decisions. Furthermore, it is not true — and the applicant has also drawn attention to this — that, in general, sanctions are imposed for non-observance of general decisions and that the third paragraph of Article 36 must be interpreted on the basis of such a generalization. A glance at the provisions of the Treaty shows that they often include the threat of a fine for non-observance of individual decisions (this is the case in Articles 47, 54, 64 read in conjunction with Articles 60 and 63, in Article 66 (6) read in conjunction with Article 66 (4) and in Article 68 (6)). It therefore has to be acknowledged that there is a certain substance, from the point of view of principle, in the applicant's view of the scope of Article 36. There is however another and indeed legitimate question, namely how far this textual exegesis needs to be revised having regard to the system of legal protection established by the Treaty, which in Article 33 lays down time limits for instituting proceedings on the expiration of which, in the interests of legal certainty, decisions of the High Authority cannot in principle be subject to judicial review. We do not, however, have to consider this question any further in these proceedings because, as I will immediately show, its answer clearly has no bearing on this case. The third question provides a good reason for examining the connection between the Decision which is directly challenged and the Decision of February 1959. Let us recall once more the course of events. The Decision of 13 February 1959 states that the applicant did not pay any levies for the period 1 January 1953 to 31 October 1958. The levy it was liable to pay was calculated for the period from 1 January 1953 to 31 March 1958 according to production figures supplied by the undertaking, and for the period April to October 1958 on the basis of estimates. As a result on 5 November 1958 levies amounting to 16060945 lire and surcharges for delay of 5480598 lire were payable. It was stated at the same time that, if the arrears of the levy were not paid, a surcharge for delay from 5 November 1958 at the rate of 1 % per month of the amount of levy (i.e. 160609 lire) would become payable. As the applicant, even after this Decision, at first did not make any payment either in respect of the levy or of the surcharges for delay, its liability increased. From May 1960 onwards it paid off the arrears of the levy so that after February 1961 there were clearly no outstanding arrears of levy. On the other hand, there still remained outstanding the surcharges for delay in payment; these included the surcharges on the debt owing in respect of the levy, the figures for which were given in the Decision of February 1959 and also on the levy payments which had fallen due after November 1958. In a letter of 26 April 1961 the High Authority informed the applicant of the total amount of the surcharges for delay, calculating them at 9334514 lire. At the request of the applicant it remitted on 18 June 19622334514 lire of this sum. A demand for payment of the remainder of the 7 million lire was finally made in the contested Decision of November 1962. It is clear from the administrative proceedings that if the Decision of November 1962 is properly construed, it consists of three parts: (i) It includes surcharges for delay in payment, which were dealt with in the Decision of February 1959, to the extent to which they relate to the non-payment of the levies which had fallen due up to November 1958; (ii) It includes surcharges for delay in payment on the levy which fell due on and after November 1958; (iii) It confirms the partial remission of the surcharges for delay in payment which was granted by the letter of 18 June 1962. So far as the first point is concerned the Decision of November 1962 is not a decision made in implementation of the Decision of February 1959 or a decision imposing a sanction for non-compliance with one of the obligations laid down in the latter Decision, but a repetition of that Decision amended to the extent of the grant of the partial remission. With regard to the second point, it is clear that the obligation to pay the levy, the non-compliance with which led to the surcharges for delay in payment, has not yet been the subject of an individual decision and thus was not the subject of the Decision of February 1959, but derives directly from the general Decisions relating to the levy. Therefore there is not in fact the necessary relationship between the content of the Decision of November 1962 and the Decision of February 1959 to justify an application under Article 36 of the Treaty and this precludes the resubmission for review to the Court of the Decision of February 1959 and the general Decisions upon which it is based.