Case C-226/03 P: Appeal brought on 23 May 2003 (fax of 22 May) by José Martí Peix SA against the judgment delivered on 13 March 2003 (not yet published in the ECR) by the Third Chamber of the Court of First Instance of the European Communities in Case T-125/01 between José Martí Peix SA and the Commission of the European Communities
Date: 2003-09-06
Institutions: Court of Justice
Subjects: European Commission, action for annulment (EU), balance of payments assistance, fishing industry, fraud against the EU

C 213/10

EN

Official Journal of the European Union

6.9.2003

which was received at the Court Registry on 22 May 2003, for
a preliminary ruling in the case of University of Huddersfield
and Commissioners of Customs and Excise on the following
questions:

Where:

1.

2.

3.

4.

a university waives its right to exemptions from VAT in
respect of any supplies of certain real property owned by
it and leases the property to a trust set up and controlled
by the university

the trust waives its right to exemption from VAT in
respect of any supplies of the real property in question
and grants to the university an underlease of the property

the lease and underlease were entered into and carried
out by the University with the sole intention of obtaining
a fiscal advantage and had no independent business
purpose

the lease and leaseback amounted to, and was intended
by the University and the trust to be, a deferral scheme
(that is, a scheme for the deferral of payment of VAT)
with a built-in feature that allowed an absolute tax saving
at a later date

European Communities in Case T-125/01 between José Martí
Peix SA and the Commission of the European Communities
was brought before the Court of Justice of the European
Communities on 23 May 2003 (fax of 22 May) by José Martí
Peix SA, represented by R. García-Gallardo and D. Domínguez
Pérez, lawyers.

The applicant claims that the Court should:

1.

declare the appeal admissible;

2.

3.

set aside the judgment of the Third Chamber of the Court
of First Instance of 13 March 2003 in Case T-125/01
José Martí Peix SA v Commission of
the European
Communities;

order the Commission to pay the entirety of the costs
incurred in the proceedings before the Court of Justice as
well as those incurred in the proceedings before the Court
of First Instance.

(a)

are the lease and the underlease taxable supplies for
the purposes of the Sixth VAT Directive (1)?

Pleas and main arguments

(b) Do they qualify as economic activities within the
meaning of the second sentence of Article 4(2) of
the Sixth VAT Directive?

( 1) Sixth Council Directive 77/388/EEC of 17 May 1977 on the
harmonization of the laws of the Member States relating to
turnover taxes — Common system of value added tax: uniform
basis of assessment OJ L 145, 13.06.1977, p. 1-40.

Appeal brought on 23 May 2003 (fax of 22 May) by José
Martí Peix SA against the judgment delivered on 13 March
2003 (not yet published in the ECR) by the Third
Chamber of the Court of First Instance of the European
Communities in Case T-125/01 between José Martí Peix
SA and the Commission of the European Communities

(Case C-226/03 P)

(2003/C 213/16)

An appeal against the judgment delivered on 13 March 2003
by the Third Chamber of the Court of First Instance of the

Instance incorrectly interpreted the
The Court of First
expression ‘continuous irregularity’ referred to in Article 3 of
Council Regulation (EC, Euratom) No 2988/95 of 18 Decem-
ber 1995 on the protection of the European Communities
financial interests (OJ 1995 L 312, p. 1). As a result of the
broad construction given by the Court of First Instance to that
expression, the principle of prescription is rendered devoid of
practical effect and the interpretation is incompatible with the
substance of that principle, which is to penalise an authority’s
failure to take any action in respect of an irregularity. The
point of prescription is to safeguard the principle of legal
certainty and to guarantee the principle of sound administrat-
ive practice. The principle of Community solidarity must be
interpreted correctly and cannot be used in order to render the
principle of prescription inapplicable.

The consequences of that incorrect interpretation are serious,
inasmuch as Regulation No 2988/95 is a regulation of
general application where expenditure is financed from the
Community budget. The Court of First Instance’s interpretation
of the Regulation must therefore be followed at national level
by the various authorities involved, in spite of the fact that it
entails restriction of the protection enjoyed by every citizen
vis-à-vis public authorities.