CELEX: C2003/213/15
Language: en
Date: 2003-09-06 00:00:00
Title: Case C-223/03: Reference for a preliminary ruling by the VAT and Duties Tribunals, Manchester Tribunal Centre, by direction of that court dated 16 May 2003, in the case of University of Huddersfield Higher Education Corporation against Commissioners of Customs and Excise

6.9.2003               EN                         Official Journal of the European Union                                             C 213/9
Pleas in law and main arguments                                           attempt to clarify the scientific and political complexities of
                                                                          this case as soon as possible, always keeping in mind the
                                                                          fundamental objective of protecting public health. The CFI’s
                                                                          findings can also be considered to be insufficiently motivated.
(1)    Error in the interpretation and application of Regulation
       2377/90 ( 2) and, in particular, Article 14 thereof
                                                                          (4) Error in the interpretation and application of
                                                                                 Article 228 EC concerning the non-contractual liability
The findings of the CFI rest clearly on the interpretation that                  of the Community
Article 14 of Regulation 2377/90 gives the applicants an
enforceable right to have a decision taken on their applications          The Commission submits that the CFI committed two basic
before January 2000 and, secondly, imposes on the Com-                    legal errors. First, it failed to take into account the degree of
mission an absolute obligation to act by completing the                   discretion enjoyed by the Commission in these cases and held
scientific evaluation and by taking a final decision in all               without proper consideration that the alleged breach of the
applications concerning substances already in use in the                  principle of sound administration was ‘clear and serious’.
Member States on the date of entry into force of the Regulation           Second, it misinterpreted the provisions of Regulation 2377/
before 1 January 2000, or, failing this, to arrange for a                 90 and its relationship with other provisions of community
deferral of that deadline. The Commission submits that this               law, in particular directives 81/851 (3) and 96/22 (4), by
interpretation is a fundamental error of law that permeates the           accepting causality between the alleged damage and the
entire reasoning on which the CFI’s judgment is based.                    Commission’s ‘inaction’.
                                                                          (5)      Finally, the Commission submits that the CFI made an
                                                                          error in law in finding that the Commission is liable for
(2)    Errors of law in the interpretation and application of the         damages to Pharmacia by failing to take into account its
       principle of sound administration                                  different position compared with the position of the applicant
                                                                          Ceva.
It is submitted that the characterisation of the Commission’s
inaction by the CFI as being such that it gave rise to damages            (1 ) OJ C 45, 10/02/2001, p. 19.
for a clear and serious breach of the principle of sound                  (2 ) Council Regulation (EEC) no 2377/90 of 26 June 1990 laying
administration is based on the following errors regarding the                  down a Community procedure for the establishment of maximum
interpretation and application of that principle:                              residue limits of veterinary medicinal products in foodstuffs of
                                                                               animal origin OJ L 224, 18/08/1990, p. 1.
                                                                          (3 ) Council Directive 81/851/EEC of 28 September 1981 on the
—     failure to assess the time taken in relation to the different            approximation of the laws of the Member States relating to
      procedural stages involved;                                              veterinary medicinal products OJ L 317, 06/11/1981, p. 1.
                                                                          (4 ) Council Directive 96/22/EC of 29 April 1996 concerning the
                                                                               prohibition on the use in stockfarming of certain substances
—     failure to give due weight to the complexity of the                      having a hormonal or thyrostatic action and of ß-agonists, and
      progesterone file in assessing the time taken by the                     repealing Directives 81/602/EEC, 88/146/EEC and 88/299/EEC
      Commission;                                                              OJ L 125, 23/05/1996, p. 3.
—     placing undue emphasis on the time limit found in
      Article 14 of Regulation 2377/90 and its relation to the
      principle of sound administration;
—     failure to take due account of the balancing of interests
      that the Commission had to undertake.                               Reference for a preliminary ruling by the VAT and Duties
                                                                          Tribunals, Manchester Tribunal Centre, by direction of
                                                                          that court dated 16 May 2003, in the case of University
                                                                          of Huddersfield Higher Education Corporation against
                                                                                       Commissioners of Customs and Excise
(3)    Misconstrual of the evidence and inadequate reasoning
                                                                                                     (Case C-223/03)
The Commission submits that the CFI fundamentally miscon-
strued the factual and scientific record, in the sense that the                                      (2003/C 213/15)
claimed ‘inaction’ of the Commission to place progesterone in
one of the annexes to Regulation 2377/90 before 1 January
2000 was fully justified by the prevailing circumstances of this
case and the undisputed scientific uncertainty and the potential          Reference has been made to the Court of Justice of the
for abuse of progesterone. Far from staying inactive, the                 European Communities by a direction of the VAT and Duties
Commission has been taking a number of concrete steps in its              Tribunals, Manchester Tribunal Centre, dated 16 May 2003,
 ---pagebreak--- 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               European Communities in Case T-125/01 between José Martí
a preliminary ruling in the case of University of Huddersfield             Peix SA and the Commission of the European Communities
and Commissioners of Customs and Excise on the following                   was brought before the Court of Justice of the European
questions:                                                                 Communities on 23 May 2003 (fax of 22 May) by José Martí
                                                                           Peix SA, represented by R. García-Gallardo and D. Domínguez
                                                                           Pérez, lawyers.
Where:
1.     a university waives its right to exemptions from VAT in
       respect of any supplies of certain real property owned by           The applicant claims that the Court should:
       it and leases the property to a trust set up and controlled
       by the university
                                                                           1.    declare the appeal admissible;
2.     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          2.    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
3.     the lease and underlease were entered into and carried
                                                                                 Communities;
       out by the University with the sole intention of obtaining
       a fiscal advantage and had no independent business
       purpose                                                             3.    order the Commission to pay the entirety of the costs
                                                                                 incurred in the proceedings before the Court of Justice as
4.     the lease and leaseback amounted to, and was intended                     well as those incurred in the proceedings before the Court
       by the University and the trust to be, a deferral scheme                  of First Instance.
       (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
       (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?                                      The Court of First Instance incorrectly interpreted the
                                                                           expression ‘continuous irregularity’ referred to in Article 3 of
                                                                           Council Regulation (EC, Euratom) No 2988/95 of 18 Decem-
( 1) Sixth Council Directive 77/388/EEC of 17 May 1977 on the              ber 1995 on the protection of the European Communities
     harmonization of the laws of the Member States relating to            financial interests (OJ 1995 L 312, p. 1). As a result of the
     turnover taxes — Common system of value added tax: uniform
                                                                           broad construction given by the Court of First Instance to that
     basis of assessment OJ L 145, 13.06.1977, p. 1-40.
                                                                           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
Appeal brought on 23 May 2003 (fax of 22 May) by José                      principle of prescription inapplicable.
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
                                                                           The consequences of that incorrect interpretation are serious,
   SA and the Commission of the European Communities                       inasmuch as Regulation No 2988/95 is a regulation of
                                                                           general application where expenditure is financed from the
                         (Case C-226/03 P)                                 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
                          (2003/C 213/16)                                  entails restriction of the protection enjoyed by every citizen
                                                                           vis-à-vis public authorities.
An appeal against the judgment delivered on 13 March 2003
by the Third Chamber of the Court of First Instance of the