Judgment of the Court of 10 March 1970. - Commission of the European Communities v Italian Republic. - Case 7-69.



European Court reports 1970 Page 00111

Danish special edition Page 00021

Greek special edition Page 00271

Portuguese special edition Page 00289



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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OBLIGATIONS OF MEMBER STATES - FAILURE TO FULFIL - APPLICATION BY THE COMMISSION - SUBJECT-MATTER - ALTERATION IN THE COURSE OF THE PROCEEDINGS - INADMISSIBILITY

( EEC TREATY, ARTICLE 169 )

Summary

BECAUSE OF THE IMPORTANCE WHICH THE TREATY ATTACHES TO THE ACTION AVAILABLE TO THE COMMUNITY AGAINST MEMBER STATES FOR FAILURE TO FULFIL OBLIGATIONS, THIS PROCEDURE IS IN ARTICLE 169 SURROUNDED BY GUARANTEES WHICH MUST NOT BE IGNORED, PARTICULARLY IN VIEW OF THE OBLIGATION IMPOSED BY ARTICLE 171 ON MEMBER STATES TO TAKE AS A CONSEQUENCE OF THIS ACTION THE NECESSARY MEASURES TO COMPLY WITH THE JUDGMENT OF THE COURT . ACCORDINGLY THE COURT CANNOT GIVE JUDGMENT ON A FAILURE TO FULFIL AN OBLIGATION OCCURRING AFTER LEGISLATION HAS BEEN AMENDED DURING THE COURSE OF THE PROCEEDINGS WITHOUT THEREBY ADVERSELY AFFECTING THE RIGHTS OF THE MEMBER STATE TO PUT FORWARD ITS ARGUMENTS IN DEFENCE BASED ON COMPLAINTS FORMULATED ACCORDING TO THE PROCEDURE LAID DOWN BY ARTICLE 169 . IN SUCH CIRCUMSTANCES IT IS FOR THE COMMISSION TO COMMENCE NEW PROCEEDINGS UNDER ARTICLE 169 WITH REGARD TO THE EFFECTS OF THE LEGISLATION, AND IF NECESSARY TO REFER TO THE COURT THE SPECIFIC SHORTCOMING UPON WHICH IT DESIRES THE COURT TO PRONOUNCE .

Parties

IN CASE 7/69

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY GIUSEPPE MARCHESINI, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF EMILE REUTER, 4, BOULEVARD ROYAL, APPLICANT,

V

GOVERNMENT OF THE ITALIAN REPUBLIC, REPRESENTED BY ADOLFO MARESCA, MINISTER PLENIPOTENTIARY, ACTING AS AGENT, ASSISTED BY PIETRO PERONACI, DEPUTY STATE ADVOCATE-GENERAL, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE ITALIAN EMBASSY, DEFENDANT,

Subject of the case

APPLICATION FOR A DECLARATION THAT THE ITALIAN REPUBLIC, BY APPLYING A SYSTEM OF TURNOVER TAX WHICH PLACES A HEAVIER BURDEN ON SKIN WOOL AND CARDED OR COMBED WOOL IMPORTED FROM OTHER MEMBER STATES OF THE EEC THAN ON SIMILAR DOMESTIC PRODUCTS, HAS FAILED TO FULFIL THE OBLIGATION PLACED ON IT BY ARTICLE 95 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY,

Grounds

1 AFTER ISSUING ITS REASONED OPINION OF 17 JULY 1968 THE COMMISSION, IN AN APPLICATION LODGED ON 4 FEBRUARY 1969, REQUESTED THE COURT UNDER ARTICLE 169 OF THE EEC TREATY " TO DECLARE THAT THE ITALIAN REPUBLIC, BY APPLYING A SYSTEM OF TURNOVER TAX WHICH PLACES A HEAVIER BURDEN ON SKIN WOOL AND CARDED OR COMBED WOOL IMPORTED FROM OTHER MEMBER STATES OF THE EEC THAN ON SIMILAR DOMESTIC PRODUCTS, HAS FAILED TO FULFIL THE OBLIGATION PLACED ON IT BY ARTICLE 95 OF THE TREATY ".

2 IN A WRITTEN STATEMENT SUBMITTED ON 26 JULY 1969 THE ITALIAN REPUBLIC OBSERVED THAT A DECREE-LAW OF 2 JULY 1969, WHICH AMENDED THE TAX SYSTEM IN DISPUTE WAS, IN ITS OPINION, OF SUCH A NATURE AS TO CALL FOR THE WITHDRAWAL OF THE APPLICATION . THE COMMISSION REPLIED THAT THE PROVISIONS OF THIS DECREE-LAW DID NOT MAKE IT POSSIBLE TO DRAW THE CONCLUSION THAT IN THE PRESENT CASE ANY INFRINGEMENT OF ARTICLE 95 OF THE TREATY HAD CEASED AND THAT CONSEQUENTLY IT COULD NOT CONSIDER ANY COURSE OF ACTION OTHER THAN TO CONTINUE WITH THE CASE .

3 HOWEVER, THE PARTIES HAVE DEVOTED SINCE THEN THE MAJOR PART OF THEIR ARGUMENTS TO THE EFFECTS AND THE BURDEN OF THE TAX SYSTEM BROUGHT INTO OPERATION BY THE SAID DECREE-LAW . THE COMMISSION DOES NOT, MOREOVER, REFER TO ANY OBJECTIVE OTHER THAN THAT OF PUTTING AN EFFECTIVE END TO THE SPECIFIC VIOLATION ALLEGED AGAINST THE ITALIAN REPUBLIC, SO THAT ITS ONLY AIM APPEARS TO BE TO TERMINATE ANY VIOLATION WHICH MAY STILL EXIST .

4 IT FOLLOWS FROM THE FOREGOING THAT, ALTHOUGH THE PARTIES STILL DISAGREE ABOUT THE EFFECTS OF THE ABOVE-MENTIONED DECREE-LAW, THEY HAVE NEVERTHELESS TAKEN THE VIEW THAT THIS MEASURE SUBSTANTIALLY AFFECTS THE OUTCOME OF THE PRESENT DISPUTE AND THEY HAVE ACCORDINGLY REQUESTED THE COURT TO CONSIDER THE RESULTING SITUATION AS A WHOLE . IN SO DOING THE APPLICANT HAS THUS AMENDED THE SUBJECT-MATTER OF ITS APPLICATION SO THAT IT IS NO LONGER CONCERNED ONLY WITH THE QUESTION WHETHER AT THE TIME WHEN THE APPLICATION WAS LODGED THERE WAS A FAILURE ON THE PART OF THE ITALIAN REPUBLIC TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 95, BUT PRINCIPALLY WITH THE QUESTION WHETHER THIS FAILURE STILL CONTINUES AFTER THE COMING INTO FORCE OF THE DECREE-LAW .

5 IN THE PRESENT ACTION IT IS NOT POSSIBLE FOR THE COURT TO DECIDE WHETHER THE SITUATION CREATED BY DECREE-LAW NO 319 IS COMPATIBLE WITH THE OBLIGATIONS IMPOSED UPON MEMBER STATES UNDER ARTICLE 95 OF THE TREATY . BECAUSE OF THE IMPORTANCE WHICH THE TREATY ATTACHES TO THE ACTION AVAILABLE TO THE COMMUNITY AGAINST MEMBER STATES FOR FAILURE TO FULFIL OBLIGATIONS, THIS PROCEDURE IN ARTICLE 169 IS SURROUNDED BY GUARANTEES WHICH MUST NOT BE IGNORED, PARTICULARLY IN VIEW OF THE OBLIGATION IMPOSED BY ARTICLE 171 ON MEMBER STATES TO TAKE AS A CONSEQUENCE OF THIS ACTION THE NECESSARY MEASURES TO COMPLY WITH THE JUDGMENT OF THE COURT . ACCORDINGLY THE COURT CANNOT GIVE JUDGMENT IN THE PRESENT CASE ON THE FAILURE TO FULFIL AN OBLIGATION OCCURRING AFTER LEGISLATION HAS BEEN AMENDED DURING THE COURSE OF THE PROCEEDINGS WITHOUT THEREBY ADVERSELY AFFECTING THE RIGHTS OF THE MEMBER STATE TO PUT FORWARD ITS ARGUMENTS IN DEFENCE BASED ON COMPLAINTS FORMULATED ACCORDING TO THE PROCEDURE LAID DOWN BY ARTICLE 169 .

6 IN SUCH CIRCUMSTANCES IT IS FOR THE COMMISSION TO COMMENCE NEW PROCEEDINGS UNDER ARTICLE 169 WITH REGARD TO THE EFFECTS OF DECREE-LAW NO 319, AND IF NECESSARY TO REFER TO THE COURT THE SPECIFIC SHORTCOMING UPON WHICH IT DESIRES THE COURT TO PRONOUNCE . IN VIEW OF THE CHANGE IN THE SUBJECT-MATTER OF THE DISPUTE, THE REQUEST AS ORIGINALLY FORMULATED IN THE APPLICATION MUST THEREFORE BE DISMISSED .

Decision on costs

7 THE REASON FOR THE DISMISSAL OF THE APPLICATION LIES IN THE AMENDMENT OF THE ITALIAN LEGISLATION AND THE CONSEQUENT CHANGE IN SUBJECT-MATTER OF THE APPLICATION, AS SUGGESTED BY THE DEFENDANT AND ACCEPTED BY THE APPLICANT .

THIS IS AN EXCEPTIONAL CIRCUMSTANCE JUSTIFYING APPLICATION OF THE FIRST SUBPARAGRAPH OF ARTICLE 69 ( 3 ) OF THE RULES OF PROCEDURE . THEREFORE, THE PARTIES SHOULD BE ORDERED TO BEAR THEIR OWN COSTS .

Operative part

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION;

2 . ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .