IT TRANSPIRES FROM THE FILE FORWARDED BY THE NATIONAL COURT THAT THE PLAINTIFF IN THE MAIN ACTION SOLD FREE-AT-FACTORY TO A GERMAN BUYER UNERECTED MACHINERY FOR USE IN THE TEXTILE INDUSTRY, ON WHICH THE BUYER AT THE TIME OF IMPORTATION PAID TURNOVER EQUALIZATION TAX AT THE RATE OF 6 PER CENT .
THE PLAINTIFF IN THE MAIN ACTION THEN PROCEEDED TO INSTALL THE MACHINERY AND PUT IT INTO SERVICE, WHICH OPERATION WAS CHARGED, UNDER THE HEADING OF SUPPLY OF GOODS AND PROVISIONS OF SERVICES ( WERKLIEFERUNG ), WITH TURNOVER TAX AT THE RATE OF 4 PER CENT, CALCULATED ON THE ADDED VALUE OF THE SUPPLY OF SERVICES AND THE INSTALLED MACHINERY .
4 AS THE BENEFITS TAXED HAD ARISEN DURING THE PERIOD FROM 1962 TO 1967, IT FOLLOWS THAT THE QUESTIONS OF INTERPRETATION RAISED WERE DONE SO IN RELATION TO THE TURNOVER TAX, AS PROVIDED FOR BY THE GERMAN LAW OF 1 SEPTEMBER 1951 .
5 THE FIRST TWO PARAGRAPHS OF ARTICLE 95 PROHIBIT ANY MEMBER STATE FROM IMPOSING ON THE PRODUCTS OF OTHER MEMBER STATES ANY INTERNAL TAXATION IN EXCESS OF THAT IMPOSED ON SIMILAR DOMESTIC PRODUCTS OR OF SUCH A NATURE AS TO AFFORD INDIRECT PROTECTION TO OTHER DOMESTIC PRODUCTS .
SUCH A SYSTEM IS INTENDED TO ENSURE EQUALITY OF TREATMENT IN INTERNAL TAXATION .
THE PROHIBITION OF DISCRIMINATION LAID DOWN BY ARTICLE 95, THEREFORE, CONCERNS NOT ONLY THE RATE BUT ALSO THE BASIS OF TAXATION .
6 ALTHOUGH IT IS IN THE NATURE OF THE CUMULATIVE MULTI-STAGE TAX TO CHARGE SUCCESSIVELY AND WITHOUT ANY DEDUCTION THE DIFFERENT TRANSACTIONS TO WHICH A PRODUCT IS SUBJECT, ARTICLE 95 PROHIBITS THE BREAKING DOWN INTO TWO DISTINCT AND, THEREFORE SEPARATELY TAXABLE, OPERATIONS CONCERNING IMPORTED GOODS AN OPERATION WHICH, IN REGARD TO A DOMESTIC PRODUCT, WOULD CONSTITUTE A SINGLE TRANSACTION .
THIS WOULD BE THE CASE IF, HAVING AT THE FRONTIER BORNE TURNOVER TAX BY REASON OF DELIVERY, THE FOREIGN PRODUCT, WHEN INSTALLED, WAS CHARGED NOT ONLY ON THE VALUE OF THE SUPPLY OF THE SERVICES INVOLVING INSTALLATION, BUT AGAIN ON THE VALUE OF THE GOODS SUPPLIED, WHILE THE DOMESTIC PRODUCT DELIVERED AND INSTALLED UNDER THE SAME CONDITIONS WOULD ONLY BE CHARGED WITH ONE TAX, SUPPLY AND INSTALLATION BEING DEEMED TO BE A SINGLE OPERATION .
7 THE PROHIBITION OF DISCRIMINATION IS CONCERNED, THEREFORE, WITH A FISCAL SYSTEM UNDER WHICH, AS IS PRESUMED BY THE ORDER REFERRING THE MATTER, AN IMPORTED PRODUCT IS CHARGED TWICE WITH TURNOVER TAX, ON THE FOOTING THAT IT HAS BEEN THE SUBJECT OF TWO DISTINCT TRANSACTIONS, ON THE BASIS OF AN OPERATION WHICH, IN RESPECT OF A SIMILAR DOMESTIC PRODUCT AT THE SAME MARKETING STAGE, WOULD CONSTITUTE ONLY ONE CHARGEABLE OPERATION .
8 HOWEVER THE QUESTION OF WHETHER THE TURNOVER EQUALIZATION TAX ESTABLISHED BY THE GERMAN LAW OF 1 SEPTEMBER 1951 INCLUDES THE TURNOVER TAX, IN ADDITION TO EQUALIZATION FOR PRIOR CHARGES, IS A MATTER OF CONTROVERSY .
THE COURT DOES NOT HAVE JURISDICTION UNDER ARTICLE 177 TO SETTLE A DISPUTE RELATING TO THE INTERPRETATION OF A