1.

The Court has, on several occasions, had to interpret the first paragraph of Article 95 of the Treaty of Rome which, as we all know, prohibits Member States from imposing, ‘directly or indirectly’, any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products. The essential issue in the present case is whether this prohibition also covers a tax applied to the carriage of goods by road and which, in specified circumstances, falls more heavily on products coming from other Member States than on similar products transported over the same distances wholly within the State imposing it. In 1968, the Government of the Federal Republic of Germany adopted a policy programme for transport for the period 1968 to 1972 for the purpose of disposing of certain difficulties in that sector. It regarded it as necessary to encourage the use of the railways by reducing transport by road and accordingly decided to subject the latter to temporary fiscal measures. Thus, on 28 December 1968, a Law was enacted relating to the tax on the carriage of goods by road (Gesetz über die Besteuerung des Straßengüterverkehrs), which was intended to affect, in particular, the transport by road of loads over long distances within German territory. Specifically, under that Law, there was exemption from tax only in the case of the internal transport of goods effected within the confines of a circle with a radius of 50 kilometres as the crow flies from a centre which consists of the place where the transport undertaking has its registered offices or place of business (the circle, which is called a ‘Nahzone’, was already provided for in Paragraph 2 (2) of the Law of 17 October 1952 on the Carriage of Goods by Road). In the case of journeys outside the confines of the free zone, there is a tax of DM 0-01 per km on every tonne carried but if the carrier transports goods which are his own property, as in the case of the plaintiff in the main action, the rate of tax increases when the permitted load is in excess of 4 tonnes and goes up to DM 0-05 per km per tonne actually carried when the load capacity of the vehicle is greater than 6 tonnes. The said Law introduced different regulations to cover cases in which transport by road involves crossing the German frontier in either direction. Transport coming from another State or proceeding to another State is exempt from the tax only if, in the first case, the unloading point and, in the second case, the loading point is situated in Germany at a distance not greater than 50 km from the point at which the frontier is crossed (Paragraph 3 (5)). In that case, the place where the transport undertaking has its premises is ignored and the fiscal question is settled as though the registered office of the undertaking, whether German or foreign, is situated at the place where the vehicle crosses the frontier of the Federal Republic. The consequence of this is that the distance which can be travelled free of tax cannot reach the maximum kilometrage, which is equivalent to the diameter of a ‘Nahzone’ lying wholly in German territory, but is restricted to the 50 km between the frontier and the point at which the goods are loaded or unloaded. In this way, in cases where, taking into account the actual premises of the transport undertaking and the distance travelled from the loading point to the unloading point, international traffic could come within the concept of ‘local traffic’ which is free of tax, it is nevertheless treated as long-distance traffic simply owing to the fact of crossing the frontier and on each occasion is unable to benefit from the limited tax-exemption provided for in the above mentioned Paragraph 3 (5) of the 1968 Law. In the case which is now before the Court, proceedings were brought in the national court by the Schöttle undertaking, whose registered office is in Oberkollwangen, and whose business is concerned both with the transport of passengers and goods over short distances and with wholesale dealing in gravel and sand. As part of this business it transported gravel excavated direct from the Lauterbourg quarry in Alsace, and then delivered it in the Stuttgart area. If, in the case of transport over the same distance, the vicinity of Lauterbourg were situated in Germany, it would come into the local traffic zone which would be formed if the vicinity of Oberkollwangen were taken as the centre of the circle and the Schöttle company would, in consequence, not be obliged to pay the tax provided for by the Law of 28 December 1968. However, the exemption of international traffic provided for under Paragraph 3 (5) of the Law does not enable the transport described above to escape the tax because Stuttgart is more than 50 km from the point at which the Franco-German frontier is crossed. In the light of this situation the Finanzgericht Baden-Württemberg, before which the Schöttle company brought proceedings against the taxation decision of the national fiscal authorities, has referred to this Court for a preliminary ruling under Article 177 of the EEC Treaty four questions which I shall quote and discuss one by one. I ought, finally, to place on record that, subsequent to the order making the reference, the German fiscal authorities waived their tax claim against the Schöttle company because they recognized that, in the particular circumstances involved, the tax had a discriminatory effect which was not intended by the legislature. It thereupon requested the Finanzgericht to withdraw the order making the reference to this Court on the ground that the proceedings had now lost their purpose. The plaintiff company opposed this request, and the Finanzgericht held that the waiver, on grounds of equity, of the amount due, did not deprive the annulment proceedings of their purpose, when account was taken, inter alia, of the loss which the taxation measure might have caused to the plaintiff (which claims that it had to give up its French suppliers of gravel and, in consequence, to reorganize its business at a substantial financial loss).