Judgment of the Court of 28 April 1971. - Alfons Lütticke GmbH v Commission of the European Communities. - Case 4-69.



European Court reports 1971 Page 00325

Danish special edition Page 00073

Greek special edition Page 00769

Portuguese special edition Page 00111



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . PROCEDURE - APPLICATION - ADMISSIBILITY - CONDITIONS - REFERENCE TO OTHER PROCEEDINGS - PERMISSIBILITY

( RULES OF PROCEDURE, ARTICLE 38 )

2 . PROCEDURE - ACTION FOR DAMAGES - INDEPENDENT NATURE - RESULT COMPARABLE TO THAT OF ACTION FOR FAILURE TO ACT - PERMISSIBILITY

( EEC TREATY, ARTICLES 178, 215 )

3 . LIABILITY - FISCAL PROVISIONS - CUMULATIVE MULTI-STAGE TAX - ESTABLISHMENT OF AVERAGE RATES - DISCRETIONARY POWER OF THE STATE AND OF THE COMMISSION - EXCLUSION OF LIABILITY

( EEC TREATY, ARTICLE 97 )

Summary

1 . AN APPLICATION SATISFIES THE REQUIREMENTS OF ARTICLE 38 ( 1 ) OF THE RULES OF PROCEDURE WHEN IT CONTAINS ALL THE DETAILS NECESSARY TO ESTABLISH WITH CERTAINTY THE SUBJECT-MATTER OF THE DISPUTE AND THE LEGAL SCOPE OF THE GROUNDS INVOKED IN SUPPORT OF THE SUBMISSIONS .

ITS ADMISSIBILITY IS NOT AFFECTED BY REFERENCE, IN ADDITION, TO OTHER PROCEEDINGS BROUGHT BEFORE THE COURT .

2 . THE ACTION FOR DAMAGES PROVIDED FOR BY ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215 WAS ESTABLISHED BY THE TREATY AS AN INDEPENDENT FORM OF ACTION WITH A PARTICULAR PURPOSE TO FULFIL WITHIN THE SYSTEM OF ACTIONS AND SUBJECT TO CONDITIONS FOR ITS USE CONCEIVED WITH A VIEW TO ITS SPECIFIC PURPOSE .

IT WOULD BE CONTRARY TO THE INDEPENDENT NATURE OF THIS ACTION AS WELL AS TO THE EFFICACY OF THE GENERAL SYSTEM OF FORMS OF ACTION CREATED BY THE TREATY TO REGARD AS A GROUND OF INADMISSIBILITY THE FACT THAT, IN CERTAIN CIRCUMSTANCES, AN ACTION FOR DAMAGES MIGHT LEAD TO A RESULT SIMILAR TO THAT OF AN ACTION FOR FAILURE TO ACT UNDER ARTICLE 175 .

3 . THE SYSTEM PROVIDED FOR BY ARTICLE 97 IMPLIES, ON THE PART OF STATES WHICH HAVE RECOURSE TO IT, THE EXERCISE OF A DISCRETION IN REGARD TO THE ASSESSMENT OF THE BURDEN OF TAX ON THE DOMESTIC PRODUCT WHICH DETERMINES THE LEVEL OF THE AVERAGE RATES AND THE TAX PROCEDURE .

IT IMPLIES, ON THE PART OF THE COMMISSION, A POWER OF SUPERVISION THE EXERCISE OF WHICH PRESUPPOSES BOTH A DISCRETION TO APPRAISE THE FACTORS WHICH THE STATE HAS TAKEN INTO CONSIDERATION AND RESPECT FOR THE MARGIN OF DISCRETION LEFT TO THE STATE CONCERNED .

AS LONG AS THE COMMISSION HAS NOT EXCEEDED THESE DISCRETIONARY POWERS, THE LIABILITY OF THE COMMUNITY DOES NOT ARISE .

Parties

IN CASE 4/69

ALFONS LUETTICKE GMBH, HAVING ITS REGISTERED OFFICE IN GERMINGHAUSEN AND A BRANCH OFFICE IN COLOGNE-DEUTZ, REPRESENTED BY PETER WENDT, ADVOCATE OF THE HAMBURG BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF FELICIEN JANSEN, HUISSIER, 21 RUE ALDRINGEN, APPLICANT,

V

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISERS, JOCHEN THIESING AND ROLF WAEGENBAUR, ACTING AS AGENTS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER, EMILE REUTER, 4 BOULEVARD ROYAL, DEFENDANT,

Subject of the case

APPLICATION FOR DAMAGES UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY,

Grounds

1 THE APPLICANT REQUESTS THE COURT, ON THE BASIS OF ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY, TO ORDER THE COMMUNITY TO MAKE GOOD THE DAMAGE CAUSED TO THE APPLICANT BY THE COMMISSION' S FAILURE TO ADDRESS TO THE FEDERAL REPUBLIC OF GERMANY A DIRECTIVE OR A DECISION UNDER THE SECOND PARAGRAPH OF ARTICLE 97 ORDERING IT TO ABOLISH WITH EFFECT FROM 1 JANUARY 1962 THE TURNOVER EQUALIZATION TAX ON MILK POWDER OR, AT LEAST, TO REDUCE IT TO A LEVEL COMPATIBLE WITH THE PROVISIONS OF ARTICLE 95 AND THE FIRST PARAGRAPH OF ARTICLE 97 .

ADMISSIBILITY

2 THE DEFENDANT MAINTAINS THAT THE APPLICATION DOES NOT SATISFY THE REQUIREMENTS OF ARTICLE 38 ( 1 ) OF THE RULES OF PROCEDURE BY REASON OF THE FACT THAT, FIRST, IT REFERS, IN RESPECT OF CERTAIN ASPECTS OF THE DISPUTE, TO ARGUMENTS PUT FORWARD IN OTHER CASES BROUGHT BEFORE THE COURT AND, SECONDLY, IT DOES NOT GIVE GROUNDS FOR THE CLAIM OF 8 PER CENT INTEREST IN ADDITION TO THE PRINCIPAL SUM CLAIMED .

UNDER ARTICLE 38 ( 1 ) OF THE RULES OF PROCEDURE THE APPLICATION MUST CONTAIN, INTER ALIA, AN INDICATION OF THE SUBJECT-MATTER OF THE DISPUTE, A BRIEF STATEMENT OF THE GROUNDS ON WHICH THE APPLICATION IS BASED AND THE SUBMISSIONS OF THE APPLICANT . THE APPLICATION HAS SATISFIED THESE REQUIREMENTS SINCE IT GIVES ALL THE DETAILS NECESSARY TO ESTABLISH WITH CERTAINTY THE SUBJECT-MATTER OF THE DISPUTE AND THE LEGAL SCOPE OF THE GROUNDS INVOKED IN SUPPORT OF THE SUBMISSIONS . IN THESE CIRCUMSTANCES, REFERENCE, IN ADDITION, TO OTHER PROCEEDINGS BROUGHT BEFORE THE COURT OF JUSTICE DOES NOT AFFECT THE ADMISSIBILITY OF THIS ACTION . THE QUESTION OF GIVING GROUNDS FOR THE INTEREST CLAIMED IN ADDITION TO THE PRINCIPAL SUM CONCERNS THE SUBSTANCE OF THE DISPUTE AND NOT THE QUESTION OF ADMISSIBILITY AS SUCH .

4 CONSEQUENTLY, THE OBJECTION BASED ON ARTICLE 38 ( 1 ) OF THE RULES OF PROCEDURE MUST BE DISMISSED .

5 SECONDLY, THE DEFENDANT CONTESTS THE ADMISSIBILITY OF THE ACTION BY REASON OF THE FACT THAT, ALTHOUGH INTRODUCED ON THE BASIS OF ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215, IT SEEKS IN REALITY TO ESTABLISH A FAILURE TO ACT ON THE PART OF THE COMMISSION AND TO CONSTRAIN IT INDIRECTLY TO INITIATE AGAINST THE FEDERAL REPUBLIC OF GERMANY THE PROCEDURE UNDER THE SECOND PARAGRAPH OF ARTICLE 97 AND, POSSIBLY, THAT UNDER ARTICLE 169 . IT IS CLAIMED THAT THIS MANNER OF PROCEEDING HAS THE EFFECT OF DISTORTING THE CONDITIONS TO WHICH ARTICLE 175 HAS SUBJECTED ACTIONS FOR FAILURE TO ACT .

6 THE ACTION FOR DAMAGES PROVIDED FOR BY ARTICLE 178 AND THE SECOND PARAGRAPH OF ARTICLE 215 WAS ESTABLISHED BY THE TREATY AS AN INDEPENDENT FORM OF ACTION WITH A PARTICULAR PURPOSE TO FULFIL WITHIN THE SYSTEM OF ACTIONS AND SUBJECT TO CONDITIONS FOR ITS USE, CONCEIVED WITH A VIEW TO ITS SPECIFIC PURPOSE . IT WOULD BE CONTRARY TO THE INDEPENDENT NATURE OF THIS ACTION AS WELL AS TO THE EFFICACY OF THE GENERAL SYSTEM OF FORMS OF ACTION CREATED BY THE TREATY TO REGARD AS A GROUND OF INADMISSIBILITY THE FACT THAT, IN CERTAIN CIRCUMSTANCES, AN ACTION FOR DAMAGES MIGHT LEAD TO A RESULT SIMILAR TO THAT OF AN ACTION FOR FAILURE TO ACT UNDER ARTICLE 175 .

7 THIS OBJECTION OF INADMISSIBILITY MUST THEREFORE BE DISMISSED .

8 SINCE THE DEFENDANT ASSERTS ALSO THAT THE RIGHT TO DAMAGES CLAIMED BY THE APPLICANT IS, FOR THE MOST PART, TIME-BARRED, IT MUST BE OBSERVED THAT THIS OBJECTION CONCERNS, IN REALITY, NOT THE ADMISSIBILITY OF THE APPLICATION BUT THE EXTENT OF REPARATION AND IT MUST THEREFORE BE DISMISSED .

THE SUBSTANCE OF THE CASE

9 THE APPLICANT, HAVING BEEN COMPELLED TO PAY UNDER GERMAN TAX LAW THE TURNOVER EQUALIZATION TAX ON CERTAIN PRODUCTS, BASES ITS APPLICATION ON THE FACT THAT THE COMMISSION HAS REFUSED TO USE THE POWERS CONFERRED ON IT BY THE SECOND PARAGRAPH OF ARTICLE 97 AND BY ARTICLES 155 AND 169 TO OBTAIN THE COMPLETE ABOLITION OF THE TAX IN DISPUTE OR, AT LEAST, ITS REDUCTION TO THE LEVEL OF TAXATION FIXED BY ARTICLE 95 AND THE FIRST PARAGRAPH OF ARTICLE 97 WITH, IN EITHER CASE, RETROACTIVE EFFECT TO 1 JANUARY 1962 .

10 BY VIRTUE OF THE SECOND PARAGRAPH OF ARTICLE 215 AND THE GENERAL PRINCIPLES TO WHICH THIS PROVISION REFERS, THE LIABILITY OF THE COMMUNITY PRESUPPOSES THE EXISTENCE OF A SET OF CIRCUMSTANCES COMPRISING ACTUAL DAMAGE, A CAUSAL LINK BETWEEN THE DAMAGE CLAIMED AND THE CONDUCT ALLEGED AGAINST THE INSTITUTION, AND THE ILLEGALITY OF SUCH CONDUCT .

11 IN THIS CASE, IT IS APPROPRIATE TO EXAMINE FIRST THE QUESTION WHETHER THE COMMISSION, ACTING AS IT DID, FAILED TO FULFIL THE OBLIGATIONS IMPOSED ON IT BY THE SECOND PARAGRAPH OF ARTICLE 97 .

12 UNDER THE TERMS OF ARTICLE 95, NO MEMBER STATE SHALL IMPOSE, DIRECTLY OR INDIRECTLY, ON THE PRODUCTS OF OTHER MEMBER STATES ANY INTERNAL TAXATION OF ANY KIND IN EXCESS OF THAT IMPOSED DIRECTLY OR INDIRECTLY ON SIMILAR DOMESTIC PRODUCTS . ACCORDING TO ARTICLE 97, INVOKED BY THE APPLICANT AS THE BASIS OF ITS ACTION, MEMBER STATES WHICH LEVY A TURNOVER TAX CALCULATED ON A CUMULATIVE MULTI-STAGE TAX SYSTEM MAY, IN THE CASE OF INTERNAL TAXATION IMPOSED BY THEM ON IMPORTED PRODUCTS, ESTABLISH " AVERAGE RATES " FOR PRODUCTS OR GROUPS OF PRODUCTS, PROVIDED THAT THERE IS NO INFRINGEMENT OF THE PRINCIPLES LAID DOWN IN ARTICLE 95 . UNDER THE TERMS OF THE SECOND PARAGRAPH OF THIS ARTICLE, WHERE THE AVERAGE RATES ESTABLISHED BY A MEMBER STATE DO NOT CONFORM TO THESE PRINCIPLES " THE COMMISSION SHALL ADDRESS APPROPRIATE DIRECTIVES OR DECISIONS TO THE STATE CONCERNED ".

13 THE OBJECT OF ARTICLE 97 WITH REGARD TO IMPORTS IS TO ENSURE THAT EQUALIZATION TAXES IMPOSED WITHIN THE FRAMEWORK OF A CUMULATIVE MULTI-STAGE TAX SYSTEM ARE IN CONFORMITY WITH THE PRINCIPLES OF ARTICLE 95 . HAVING REGARD TO THE SPECIAL CHARACTERISTICS OF THIS SYSTEM OF TAXATION, THE ECONOMIC EFFECT OF WHICH MAY VERY OFTEN ONLY BE CALCULATED APPROXIMATELY, THE TREATY ALLOWS MEMBER STATES TO TAKE CERTAIN MEASURES OF A FLAT-RATE NATURE CONSISTING IN THE DETERMINATION OF AVERAGE RATES OF TAX ON THE IMPORTATION OF SPECIFIC PRODUCTS OR GROUPS OF PRODUCTS . SUCH A SYSTEM NECESSARILY IMPLIES, ON THE PART OF STATES WHICH APPLY IT, THE EXERCISE OF A DISCRETION IN REGARD TO THE ASSESSMENT OF THE BURDEN OF TAX ON THE DOMESTIC PRODUCT WHICH DETERMINES THE LEVEL OF THE AVERAGE RATES AND THE TAX PROCEDURE WHICH IS CONNECTED WITH THE GENERAL SYSTEM OF THE LEGISLATION IN QUESTION .

14 FOR THE PURPOSE OF SAFEGUARDING THE REQUIREMENTS OF ARTICLE 95 AND THE FIRST PARAGRAPH OF ARTICLE 97, A SPECIAL POWER OF SUPERVISION THE EXERCISE OF WHICH PRESUPPOSES, IN TURN, A DISCRETION TO APPRAISE THE FACTORS WHICH THE STATE HAS TAKEN INTO CONSIDERATION, IS CONFERRED UPON THE COMMISSION IN PURSUANCE OF THE SECOND PARAGRAPH OF ARTICLE 97 .

15 THIS TASK HAS BEEN ALLOTTED TO THE COMMISSION FOR THE PURPOSE OF ENSURING THAT THE NATIONAL TAX SYSTEMS CONFORM TO THE REQUIREMENTS OF FREE MOVEMENT AND NON-DISCRIMINATION WHICH CONSTITUTE THE OBJECT OF ARTICLES 95 AND 97 . FOR THIS PURPOSE, THE SECOND PARAGRAPH OF ARTICLE 97 GIVES THE COMMISSION THE POWER TO DEFINE, THROUGH DIRECTIVES OR DECISIONS ADDRESSED TO STATES, THE REQUIREMENTS ARISING FROM THE TREATY WITH REGARD TO NATIONAL TAX LAWS .

16 CONSEQUENTLY, HAVING REGARD BOTH TO THE POWER OF ESTIMATION IMPLIED IN THE CONVERSION INTO " AVERAGE RATES " OF THE COMPLEX ELEMENTS RELATING TO CUMULATIVE MULTI-STAGE TAXES AND TO THE NATURE OF THE STEPS PROVIDED FOR BY THE SECOND PARAGRAPH OF ARTICLE 97, THE EXERCISE OF THE TASK OF SUPERVISION PRESCRIBED BY THIS PROVISION IMPLIES THAT ACCOUNT SHOULD BE TAKEN OF THE MARGIN OF DISCRETION LEFT TO THE MEMBER STATES CONCERNED BY THE FIRST PARAGRAPH .

17 IT IS ESTABLISHED THAT AS EARLY AS 1962 THE COMMISSION BEGAN, WITH EXPERTS FROM THE MEMBER STATES, AN EXAMINATION OF THE AVERAGE RATES PROVIDED FOR BY NATIONAL LAWS WITH A VIEW TO CHECKING THEIR CONFORMITY WITH THE REQUIREMENTS OF ARTICLE 95 AND THE FIRST PARAGRAPH OF ARTICLE 97 . DURING THIS EXAMINATION IT DISCUSSED WITH THE GERMAN AUTHORITIES AND WITH THOSE OF THE OTHER MEMBER STATES CONCERNED IN THE POWDERED MILK TRADE THE RATE APPLICABLE TO THIS PRODUCT . HAVING STUDIED THE ARGUMENTS PUT FORWARD BY THE GERMAN GOVERNMENT IT INFORMED IT THAT THE AVERAGE RATE OF 4 PER CENT IN FORCE FOR IMPORTS OF MILK POWDER INTO THE FEDERAL REPUBLIC SEEMED TO IT TO BE TOO HIGH . SINCE THE FEDERAL REPUBLIC, FOLLOWING THIS INTERVENTION, REDUCED THE RATE OF THE TAX AT ISSUE FROM 4 PER CENT TO 3 PER CENT WITH EFFECT FROM 1 APRIL 1965 - A DATE SUBSEQUENTLY BROUGHT FORWARD TO 1 JANUARY 1962 - THE COMMISSION CONSIDERED THAT THERE WAS NO LONGER ANY NEED TO ADOPT A DIRECTIVE OR A DECISION UNDER ARTICLE 97 IN ORDER TO OBTAIN AN EVEN GREATER REDUCTION . FURTHERMORE, THERE WERE NO COMPLAINTS OF ANY SORT MADE BY MEMBER STATES WHOSE EXPORTS COULD HAVE BEEN ADVERSELY AFFECTED BY THE TAX SYSTEM CRITICIZED BY THE APPLICANT . IT FOLLOWS FROM THE ABOVE THAT IN THE CIRCUMSTANCES THE COMMISSION HAS NOT FAILED TO PERFORM ITS TASK OF SUPERVISION .

18 IN ADDITION, ALTHOUGH THE EXPERT' S REPORT PRODUCED BY THE APPLICANT IN SUPPORT OF ITS ARGUMENT REACHES THE CONCLUSION THAT FOR POWDERED MILK THE AVERAGE RATE SHOULD BE LOWER, IT IS CAPABLE OF CONFIRMING THAT THE CALCULATION OF THE INDIRECT TAXES IMPOSED ON THIS PRODUCT INCLUDES A WHOLE SERIES OF UNCERTAIN FACTORS WHICH MAY GIVE RISE TO VERY DIFFERENT ASSESSMENTS, WITH THE RESULT THAT IT IS IN GENERAL POSSIBLE ONLY TO ESTABLISH CERTAIN MINIMUM AND MAXIMUM LIMITS BETWEEN WHICH SEVERAL SOLUTIONS APPEAR EQUALLY JUSTIFIABLE .

19 THE APPLICANT HAS NOT PROVED THAT FOR THE PRODUCT IN QUESTION AN AVERAGE RATE OF 3 PER CENT EXCEEDS THE LIMITS AUTHORIZED BY ARTICLES 95 AND 97 THE OBSERVANCE OF WHICH THE COMMISSION MUST ENSURE . CONSEQUENTLY, THE APPLICATION MUST BE DISMISSED .

Decision on costs

20 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS AND SINCE THE APPLICANT HAS FAILED IN ITS SUBMISSIONS IT MUST THEREFORE BEAR THE COSTS OF THE ACTION .

Operative part

THE COURT

HEREBY :

( 1 ) DISMISSES THE APPLICATION;

( 2 ) ORDERS THE APPLICANT TO BEAR THE COSTS .