Judgment of the Court (Third Chamber) of  15 December 2005  in Case C-63/04: Reference for a preliminary ruling from the High Court of Justice of England and Wales, Chancery Division Centralan Property Ltd v Commissioners of Customs & Excise (Sixth VAT Directive — Article 20(3) — Capital goods — Deduction of input tax — Adjustments of deductions — Immovable property — Disposal by means of two connected transactions, one exempt, the other taxable — Apportionment)
Date: 2006-02-11
Institutions: Court of Justice
Subjects: VAT, building, interpretation of the law, sale, tax harmonisation

11.2.2006

EN

Official Journal of the European Union

C 36/9

1. Declares that, by failing to comply with the obligations to verify
the compliance of cost accounting systems by a competent indepen-
dent body and to publish a statement of compliance for the years
in accordance with Article 7(5) of Directive
1998 and 1999,
97/33/EC of the European Parliament and of the Council of 30
June 1997 on interconnection in telecommunications with regard
to ensuring universal service and interoperability through applica-
tion of the principles of Open Network Provision (ONP) and by
failing to apply correctly in practice the measures relating to the
verification of the compliance of the cost accounting system by the
national regulatory authority or another competent body, indepen-
dent of the telecommunications organisation and approved by that
regulatory authority, for the year 2000, in accordance with the
provisions of Article 18(1) and (2) of Directive 98/10/EC of the
European Parliament and of the Council of 26 February 1998 on
the application of open network provision (ONP) to voice tele-
phony and on universal service for telecommunications in a compe-
titive environment, as maintained by Article 27 of Directive
2002/21/EC of the European Parliament and of the Council of 7
March 2002 on a common regulatory framework for electronic
communications networks and services (‘the Framework Directive’),
read in conjunction with Article 16 of Directive 2002/22/EC of
the European Parliament and of the Council of 7 March 2002 on
universal service and users' rights relating to electronic communica-
tions networks and services (‘the Universal Service Directive’), the
Grand Duchy of Luxembourg has failed to fulfil its obligations
under those provisions;

2. Orders the Commission of the European Communities and the

Grand Duchy of Luxembourg to bear their own costs.

(1) OJ C 71 of 23.03.2004.

JUDGMENT OF THE COURT

(Third Chamber)

of 15 December 2005

in Case C-63/04: Reference for a preliminary ruling from
the High Court of Justice of England and Wales, Chancery
Division Centralan Property Ltd v Commissioners of
Customs & Excise (1)

(Sixth VAT Directive — Article 20(3) — Capital goods —
Deduction of input tax — Adjustments of deductions —
Immovable property — Disposal by means of two connected
transactions, one exempt, the other taxable — Apportion-
ment)

(2006/C 36/15)

(Language of the case: English)

Wales, Chancery Division (United Kingdom), made by decision
of 21 February 2003, received at the Court on 13 February
2004, in the proceedings pending before that court between
Centralan Property Ltd and Commissioners of Customs &
Excise — the Court (Third Chamber), composed of A. Rosas,
President of the Chamber, A. La Pergola, J.-P. Puissochet, U.
Lõhmus and A. Ó Caoimh (Rapporteur),
J. Kokott,
Advocate General; L. Hewlett, Principal Administrator, for the
Registrar, gave a judgment on 15 December 2005, the opera-
tive part of which is as follows:

Judges;

Article 20(3) of Sixth Council Directive 77/388/EEC of 17 May
1977 on the harmonisation of the laws of the Member States relating
to turnover taxes — Common system of value added tax: uniform
basis of assessment, as amended by Council Directive 95/7/EC of 10
April 1995, is to be interpreted as meaning that, where a 999-year
lease over capital goods is granted to a person against the payment of
a substantial premium and the freehold reversion in that property is
transferred three days later to another person at a much lower price,
and where those two transactions

— are inextricably linked, and

— consist of a first transaction which is exempt and a second trans-

action which is taxable,

— and if those transactions, owing to the transfer of the right to
dispose of those capital goods as owner, constitute supplies within
the meaning of Article 5(1) of that directive,

the goods in question are regarded, until the expiry of the period of
adjustment, as having been used in business activities which are
presumed to be partly taxable and partly exempt in proportion to the
respective values of the two transactions.

(1) OJ C 85, 3.04.2004.

JUDGMENT OF THE COURT

(Grand Chamber)

of 6 December 2005

in Case C-66/04: United Kingdom of Great Britain and
Northern Ireland v European Parliament, Council of the
European Union (1)

(Foods — Regulation (EC) No 2065/2003 — Smoke flavour-
ings — Choice of legal basis)

(2006/C 36/16)

(Language of the case: English)

In Case C-63/04: Reference for a preliminary ruling under
Article 234 EC from the High Court of Justice of England and

In Case C-66/04: Action for annulment under Article 230 EC,
brought on 11 February 2004, United Kingdom of Great
Britain and Northern Ireland (Agents: R. Caudwell and M.