CELEX: 62000CJ0129
Language: en
Date: 2003-12-09
Title: Judgment of the Court of 9 December 2003. # Commission of the European Communities v Italian Republic. # Failure of a Member State to fulfil obligations - Construction contrary to Community law of national legislation by case-law and administrative practice - Conditions for the recovery of sums paid though not due. # Case C-129/00.

Case C-129/00 Commission of the European CommunitiesvItalian Republic
            «(Failure of a Member State to fulfil obligations – Construction contrary to Community law of national legislation by case-law and administrative practice – Conditions for the recovery of sums paid though not due)»
            
               
                  Opinion of Advocate General Geelhoed delivered on 3 June 2003 
                     
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                  Judgment of the Court, 9 December 2003  
                     
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            Summary of the Judgment
         
         
                  1..
                  Member States – Obligations – Failure to fulfil obligations – Liability – Extent – Constitutionally independent institutions(Art. 226 EC) 
         
                  2..
                  Actions for failure to fulfil obligations – Examination of the merits by the Court – Assessment of the scope of the provisions impugned – Taking into account of the interpretation by the courts of the Member State in question – Criteria(Art. 226 EC) 
         
                  3..
                  Community law – Direct effect – National charges incompatible with Community law – Repayment – Arrangements – Application of national law – Maintenance by a Member State of legislation whose construction by case-law and administrative practice makes exercise of
                     the right to repayment excessively difficult – Failure to fulfil obligations
                  
         
         1.
          A Member State's failure to fulfil obligations may, in principle, be established under Article 226 EC whatever the agency
         of that State whose action or inaction is the cause of the failure to fulfil its obligations, even in the case of a constitutionally
         independent institution. see para. 29
         
         2.
          For the purposes of an action, under Article 226 EC, for a declaration of a Member State's failure to fulfil obligations,
         the scope of national laws, regulations or administrative provisions of that Member State must be assessed in the light of
         the interpretation given to them by national courts. In that regard, isolated or numerically insignificant judicial decisions in the context of case-law taking a different direction,
         or still more a construction disowned by the national supreme court, cannot be taken into account. That is not true of a widely-held
         judicial construction which has not been disowned by the supreme court, but rather confirmed by it. Where national legislation has been the subject of different relevant judicial constructions, some leading to the application
         of that legislation in compliance with Community law, others leading to the opposite application, it must be held that, at
         the very least, such legislation is not sufficiently clear to ensure its application in compliance with Community law. see paras 30, 32-33
         
         3.
          A Member State fails to fulfil its Treaty obligations if it maintains in force legislation relating to the repayment of indirect
         charges levied in breach of Community rules, which excludes such repayment if the charges have been passed on to third parties
         and which is construed and applied by the administrative authorities and a substantial proportion of the courts, including
         the national supreme court, in such a way that the exercise of the right to repayment is made excessively difficult for the
         taxpayer, because 
         
         
         ─
         the reasoning deployed by the case-law in question is based on a premiss which is a mere presumption, namely that indirect
         taxes are in principle passed on by subsequent sales by economic operators where they have the chance; 
         
         
         ─
         the failure to produce the accounting documents of the undertaking seeking the repayment is, by itself, sufficient for it
         to be presumed that those charges have been passed on to third parties; 
         
         
         ─
         the authorities consider that the passing on of a charge is established if the amount thereof has not been accounted for,
         from the year of its payment, as a payment to the public purse for undue tax, and credited as an asset in the balance-sheet
         of the undertaking. 
         see paras 35, 37-39, 41, operative part
      

      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
            
            JUDGMENT OF THE COURT (Full Court)9 December 2003  (1)
         
         
            
         
               ((Failure of a Member State to fulfil obligations – Construction contrary to Community law of national legislation by case-law and administrative practice – Conditions for the recovery of sums paid though not due))
               
            In Case C-129/00, 
            
            
             Commission of the European Communities,   represented by E. Traversa, acting as Agent, and P. Biavati, avvocato, with an address for service in Luxembourg,
            
            
            applicant, 
            
            v
             Italian Republic,  represented by I.M. Braguglia, acting as Agent, with an address for service in Luxembourg,
            
            defendant, 
            
            APPLICATION for a declaration that, by maintaining in force Article 29(2) of Law No 428 of 29 December 1990 entitled  
            Disposizioni per l'adempimento di obblighi derivanti dall'appartenenza dell'Italia alle Comunità europee (legge comunitaria
            per il 1990) (Provisions for the fulfilment of obligations deriving from Italy's membership of the European Communities (Community law
            for 1990)) (GURI, Ordinary Supplement No 10 of 12 January 1991, p. 5) which, as construed and applied by the administrative
            authorities and the courts, allows rules of evidence in relation to the passing on to third parties of the amount of charges
            levied in breach of Community rules which make exercise of the right to repayment of such charges virtually impossible or,
            at least, excessively difficult for the taxpayer, the Italian Republic has failed to fulfil its obligations under the EC Treaty,
            
            
            THE COURT (Full Court),,
            
            composed of: V. Skouris, President, P. Jann, C.W.A. Timmermans, C. Gulmann, J.N. Cunha Rodrigues and A. Rosas, (Presidents of Chambers), D.A.O. Edward, A. La Pergola, J.-P. Puissochet (Rapporteur), R. Schintgen, F. Macken, N. Colneric and S. von Bahr, Judges, 
            
            Advocate General: L.A. Geelhoed, Registrar: L. Hewlett, Principal Administrator, 
            
            
            having regard to the Report for the Hearing,after hearing oral argument from the parties at the hearing on 2 April 2003, 
            
            after hearing the Opinion of the Advocate General at the sitting on 3 June 2003, 
         gives the following
         
         
         Judgment
         1
            
         By application lodged at the Court Registry on 4 April 2000, the Commission of the European Communities brought an action
         under Article 226 EC for a declaration that, by maintaining in force Article 29(2) of Law No 428 of 29 December 1990 entitled
          
         Disposizioni per l'adempimento di obblighi derivanti dall'appartenenza dell'Italia alle Comunità europee (legge comunitaria
         per il 1990) (Provisions for the fulfilment of obligations deriving from Italy's membership of the European Communities (Community law
         for 1990), (GURI No 10 of 12 January 1991, Ordinary Supplement, p. 5; hereinafter  
         Law No 428/1990) which, as construed and applied by the administrative authorities and the courts, allows rules of evidence in relation to
         the passing on to third parties of the amount of charges levied in breach of Community rules which make exercise of the right
         to repayment of such charges virtually impossible or, at least, excessively difficult for the taxpayer, the Italian Republic
         has failed to fulfil its obligations under the EC Treaty. 
         
            
               National law
            
         
         2
            
         Law No 428/1990 introduced into tax legislation special rules in respect of  
         repayment of taxes recognised to be incompatible with the Community rules. Article 29(2) thereof provides in that regard: Customs import duties, manufacturing taxes, consumption taxes, the tax on sugar and State duties levied under national provisions
         incompatible with Community legislation shall be repaid unless the amount thereof has been passed on to others.
         
         
         3
            
         Previously, that question was governed by the first paragraph of Article 19 of Decree-Law No 688 of 30 September 1982 (GURI
         No 270 of 30 September 1982, p. 7072), converted into law by Law No 873 of 27 November 1982 (GURI No 328 of 29 November 1982,
         p. 8599; hereinafter  
         Decree-Law No 688/1982). It provided: Any person who ... has paid customs import duties, manufacturing taxes, consumption taxes or State duties which were not due
         shall be entitled to repayment of the sums paid if he provides documentary evidence that the charge in question was not passed
         on, in any manner whatsoever, to other persons, except in the case of clerical error.
         Facts
         
         4
            
         Article 19 of Decree-Law No 688/1982 has given rise to two judgments of the Court. The first was in Case 199/82  
          San Giorgio  [1983] ECR 3595 following a reference for a preliminary ruling and the second, in Case 104/86  
          Commission  v  
          Italy  [1988] ECR 1799, was in an action by the Commission against the Italian Republic for failure to fulfil obligations. 
         
         
         5
            
         In the latter judgment, the Court held: 
         
         6
            
         ... in the absence of Community rules concerning the refunding of national charges which have been levied in breach of Community
         law, it is for the Member States to ensure the repayment of such charges in accordance with the provisions of their internal
         law. Furthermore, Community law does not require an order for the recovery of charges improperly made to be granted in conditions
         which would involve an unjust enrichment of those entitled. Thus it does not prevent the fact that the burden of such charges
         may have been passed on to other traders or to consumers from being taken into consideration. 
         
         
         7
            
         Lastly, as the Court held in the judgment ... [in]  
          San Giorgio  ..., with regard to Article 19 of the very Decree-Law at issue in this case, any requirement of proof which has the effect
         of making it virtually impossible or excessively difficult to secure the repayment of charges levied contrary to Community
         law is incompatible with Community law; that is particularly so in the case of presumptions or rules of evidence intended
         to place on the taxpayer the burden of establishing that the charges unduly paid have not been passed on to other persons
         or of special limitations concerning the form of the evidence to be adduced, such as the exclusion of any kind of evidence
         other than documentary evidence. 
         ...
         
         11
            
         ... The disputed Italian legislative provision obliges traders to prove a negative, inasmuch as, in the face of mere allegations
         by the administration, they must prove that they have not passed on the unduly paid tax to other parties, what is more by
         means of documentary evidence only.  Such a provision is contrary to the rules of Community law as developed in the Court's
         case-law.
         
         
         
         6
            
         Article 29(2) of Law No 428/1990 subsequently gave rise itself to references for preliminary rulings, to which the Court replied
         in Case C-343/96  
          Dilexport  [1999] ECR I-579. According to the national court, that provision is applied by the Italian courts to the effect that, in
         order to resist the repayment of customs duties or taxes paid though not due, the administration may rely on the presumption
         that such duties and taxes are normally passed on to third parties. 
         
         
         7
            
         The Court held as follows: 
         
         52
            
         If, as the national court considers, there is a presumption that the duties and charges unlawfully levied or collected when
         not due have been passed on to third parties and the plaintiff is required to rebut that presumption in order to secure repayment
         of the charge, the provisions in question must be regarded as contrary to Community law. 
         
         
         53
            
         If, on the other hand, as the Italian Government maintains, it is for the administration to show, by any form of evidence
         generally accepted by national law, that the charge was passed on to other persons, the provisions in question are not to
         be considered contrary to Community law. 
         
         
         54
            
         The answer to the ... questions must therefore be that Community law precludes a Member State from making repayment of customs
         duties and taxes contrary to Community law subject to a condition, such as the requirement that such duties or taxes have
         not been passed on to third parties, which the plaintiff must show he has satisfied.
         
         Pre-trial proceedings
         
         8
            
         The Commission submits, essentially, as the referring court considered in the case which gave rise to the judgment in  
          Dilexport , cited above, that, as interpreted and applied by the Italian administrative authorities and courts, the provisions of Article 29(2)
         of Law No 428/1990 lead to the same result as those of the former Article 19 of Decree-Law No 688/1982. 
         
         
         9
            
         Having given the Italian Republic an opportunity to submit its observations, the Commission, on 17 September 1997, issued
         a reasoned opinion requesting that Member State to comply with its obligations under the Treaty within a period of two months.
         Since it was not satisfied with the Italian authorities' reply by letter of 25 November 1997, the Commission decided to bring
         this action. 
         Arguments of the parties
         
         10
            
         The Commission claims that, in Joined Cases C-192/95 to C-218/95  
          Comateb and Others  [1997] ECR I-165, paragraph 25, the Court observed that, in relation to indirect taxes, no presumption can be allowed that
         a taxpayer has passed on the tax by subsequent sales, requiring him, should he wish to obtain repayment of a charge of that
         nature, to prove the contrary negative. 
         
         
         11
            
         The Commission argues that the case-law of the Corte suprema di cassazione (Italy) results in the establishment of such a
         presumption against a taxpayer who is claiming repayment of charges incompatible with Community law, which are covered by
         Article 29(2) of Law No 428/1990. The reasoning of that court's decisions on the point vary, but rest essentially on the analysis
         that, save in exceptional circumstances, commercial companies pass on indirect taxes to their customers. The most developed
         reasoning which the Corte suprema di cassazione has used to reach that conclusion, particularly in its judgment No 2844 of
         28 March 1996, is based on the following considerations: 
         
         
         ─
            the importer was not a private individual, but a commercial or industrial company; 
         
         
         
         ─
            the undertaking was trading normally, unlike in situations of loss-making or insolvency where sales at less than cost price
            could have been presumed; 
         
         
         
         ─
            the undue charges had been levied by the entire Italian customs service, which could not but have created a climate of trust
            as regards their legitimacy; 
         
         
         
         ─
            the undue charges had been applied over a long period without objection. 
         
         
         
         
         12
            
         According to the Commission, the Corte suprema di cassazione also relies on the assumption that commercial undertakings usually
         pass on indirect taxes to third parties, in order to hold that applications to the courts made by the administrative authorities
         to obtain the production of accounting documents from the undertakings concerned or the inspection thereof are not purely
          
         fishing expeditions, which would render them unlawful, but are a valid method of obtaining evidence that charges have been passed on. 
         
         
         13
            
         In addition the Corte supreme di cassazione holds, on the basis of Article 116 of the Italian Code of Civil Procedure, that
         failure to produce accounting documents following such an application, combined with the presumption that charges are usually
         passed on, proves that such has indeed been the case.  The Commission states that the same solution is applied even where
         the undertaking which fails to produce those documents explains that they have not been preserved because of the expiry of
         the 10-year period of obligatory preservation laid down by the Italian Civil Code. In view of the delays of several years
         which can occur between an application to the court for production of accounting documents and the court's decision thereon,
         an obligation to preserve those documents beyond the statutory preservation period is excessive for businesses, particularly
         because of the high costs and storage problems which it involves. It is thus an additional obstacle to the actual repayment
         of charges contrary to Community law. 
         
         
         14
            
         The Commission states that many trial courts follow those principles, as do certain experts appointed in judicial proceedings
         to examine the accounting documents of taxpayers and to determine whether or not they have passed on the charges in question.
         It provides some examples in that regard. 
         
         
         15
            
         That approach establishes a  
          de facto  presumption that taxpayers pass on to third parties the charges contrary to Community law of which they seek repayment, a
         presumption which it is then for them to rebut by adducing evidence to the contrary, in disregard of the Court's holding in
         paragraph 52 of the judgment in  
          Dilexport . 
         
         
         16
            
         The Commission adds that the reasoning in question is illogical, because it starts with the premiss that businesses usually
         pass on indirect taxes to establish a presumption in exactly the same terms as that premiss.  The factors sometimes deployed
         in this reasoning, relating to the nature of the business, the fact that the applicant is not insolvent and the general and
         long-term application of the disputed charges, are completely irrelevant. Thus, an undertaking that does not pass on charges
         to third parties might merely make a smaller profit, but would not necessarily become insolvent. To deduce from the absence
         of insolvency that taxes have actually been passed on is arbitrary. 
         
         
         17
            
         According to the Commission the Italian administrative authorities do not observe the principles applicable to the repayment
         of charges contrary to Community law either. The circulars of the Minister for Finances No 21/2/VII of 11 March 1994 and No 480/VIII
         of 12 April 1995 state essentially that the passing on of charges to third parties is established if such taxes have not been
         accounted for, from the year of their payment, as payments to the public purse for undue tax and credited as an asset in the
         balance sheet of the undertaking which is claiming their repayment. Lack of such accounting shows that the undertaking regarded
         the charges in question as ordinary expenses and necessarily passed them on. The Commission submits that such an approach
         leads to undertakings being subjected to an excessive obligation, above all as regards the years preceding the establishment
         of the incompatibility of such taxes with Community law. 
         
         
         18
            
         The Commission claims that even if certain taxpayers succeed in their actions before the trial courts, at the price, it says,
         of long and costly proceedings, that fact does not suffice to conclude that there has been observance of the principle of
         effectiveness, by which the detailed national procedural rules applied to claims based on rights which subjects derive from
         Community law must not make the exercise of those rights in practice impossible or excessively difficult. Moreover, the successful
         actions by certain taxpayers, which enabled them, according to the Italian Government, to obtain repayment of ITL 120 billion
         between 1992 and 2000, net of interest and costs, are insignificant compared with the sums which are the subject, in this
         respect, of litigation. The Commission argues that the principle of effectiveness would be observed only if cases of rejection
         of repayment claims were exceptional and maintains that the exercise of rights derived from the Treaty cannot be impeded by
         general measures based on a presumption of abuse of rights. 
         
         
         19
            
         The Italian Government accuses the Commission of indulging in speculation and ignoring facts. Only an actual finding that
         taxpayers who have paid taxes contrary to Community law cannot, or can only with great difficulty, obtain their repayment
         could amount to disregard of the principle of effectiveness. In that regard, apart from the amount of the principal sums repaid,
         mentioned in the preceding paragraph, the Italian Government points to 17 decisions or judgments by various trial courts,
         which have upheld the taxpayers' claims and become final. 
         
         
         20
            
         As regards the possibility of an inquiry by the Court to quantify the percentage of successful repayment claims in relation
         to the total number brought, the Italian Government argues that the application of such a measure would be tantamount to transferring
         to the Court the onus of proving the failure to fulfil obligations alleged by the Commission which the Commission must be
         able to prove at the end of the pre-litigation stage. 
         
         
         21
            
         In the alternative, the Italian Government analyses the principles of the detailed rules, criticised by the Commission, for
         the exercise of the right to recover sums paid though not due and argues, first, that the Commission admits that Article 29(2)
         of Law No 428/1990 is in itself compatible with Community law. It submits that that provision requires the administrative
         authorities to show that the taxpayer has passed on the charge to third parties if they are to escape the obligation to repay
         the amount thereof. 
         
         
         22
            
         The Italian Government points out, secondly, that, in paragraph 25 of the judgment in  
          Comateb and Others , cited above, the Court held that,  
         [t]he actual passing on [of an indirect tax], either in whole or in part, depends on various factors in each commercial transaction
         which distinguish it from other transactions in other contexts and,  
         [c]onsequently, the question whether an indirect tax has or has not been passed on in each case is a question of fact to be
         determined by the national court which may freely assess the evidence. The Italian Government contends that, in his Opinion in  
          Dilexport , Advocate General Ruiz-Jarabo Colomer added that the national court could call upon all the methods of proof allowed by national
         law to establish the facts. The Government explains that the Corte suprema di cassazione is not the judge of the merits, but
         confines itself to laying down certain general principles of evidence, on the basis of procedural circumstances which may
         vary considerably depending on the dispute. The judge of the merits might well accept means of deduction as methods of proof.
         The court decisions in favour of taxpayers produced in this case establish merely that the administrative authorities have
         not proved that charges were passed on. 
         
         
         23
            
         As for the administrative authorities, which are subject to this burden of proof, it is legitimate for them to seek access
         to the claimant's accounts, because only such inquiry enables them to adduce that evidence and it is not, consequently, in
         any way a  
         fishing expedition. If the claimant does not produce its accounts voluntarily, it is usual that, if it pursues its claims in court, the authorities
         seek such production by the same route. That is the meaning of the two ministerial circulars mentioned in paragraph 17 of
         this judgment and criticised by the Commission. The Italian Government makes clear that courts regard failure to produce accounts
         as an argument in favour of the authorities only if the application for production of those documents was lodged before the
         expiry of the statutory preservation period. In that case, even if the court rules on that application only after such expiry,
         the duty to act in good faith in the proceedings requires the taxpayer to preserve its accounts and to produce them pursuant
         to the judicial decision to grant the application (Judgment No 9797 of the Corte suprema di cassazione of 18 November 1994).
         
         
         
         24
            
         The Italian Government adds that even if long proceedings are sometimes necessary in order to obtain repayment, the adverse
         effects connected to such length of time are offset by the award of interest on the sums due. 
         Findings of the Court
         
         25
            
         According to the Court's settled case-law, in the absence of Community rules on the recovery of national charges levied though
         not due, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction
         and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from Community
         law, provided, first, that such rules are not less favourable than those governing similar domestic actions (principle of
         equivalence) and, secondly, that they do not render virtually impossible or excessively difficult the exercise of rights conferred
         by Community law (principle of effectiveness) (see,  
          inter alia , Case 33/76  
          Rewe  [1976] ECR 1989, paragraph 5, and Case C-255/00  
          Grundig Italiana  [2002] ECR I-8003, paragraph 33). 
         
         
         26
            
         As regards Article 29(2) of Law No 428/1990, as pointed out in paragraph 7 in this judgment and in the light of the differences
         in construction of that provision, the judgment in  
          Dilexport , cited above, delivered in the context of a reference for a preliminary ruling where it was for the national judge to decide
         the case, stated that, if there was a presumption that the duties and charges unlawfully levied or collected when not due
         have been passed on to third parties and the plaintiff was required to rebut that presumption in order to secure repayment
         of the charge, the provision in question must be regarded as contrary to Community law. 
         
         
         27
            
         In the present action for failure to fulfil obligations, it is by contrast for the Court itself to determine whether, taking
         account of the matters relied upon by the Commission, the application by the Italian authorities of Article 29(2) of Law No
         428/1990 actually leads to the establishment of such a presumption or otherwise results in making the exercise of the right
         to repayment of such taxes virtually impossible or excessively difficult, in which cases it would be necessary to make a declaration
         of the Italian Republic's failure to fulfil obligations. 
         
         
         28
            
         The Commission's complaint in support of its action has three aspects. First, many Italian courts, especially and repeatedly
         the Corte suprema di cassazione, consider that the passing on of charges to third parties is established from the sole fact
         that the claimant is a commercial undertaking, sometimes adding to it the grounds that the undertaking has not gone bankrupt
         and that the charge has been levied for years throughout the national territory without objection. Secondly, the authorities
         systematically seek the production of claimants' accounting documents. The courts before which claimants bring objections
         accede to such applications by adopting the same sort of reasoning as that set out above and they regard with disfavour claimants'
         failure to produce the documents even though the statutory period for their preservation has expired. Thirdly, the authorities
         regard failure to account for the amount of the taxes in question, from the year of their payment, as payments to the public
         purse for undue tax and credited as an asset in the balance-sheet of the undertaking which is claiming their repayment, as
         proof that those charges have been passed on to third parties. 
         
         
         29
            
         A Member State's failure to fulfil obligations may, in principle, be established under Article 226 EC whatever the agency
         of that State whose action or inaction is the cause of the failure to fulfil its obligations, even in the case of a constitutionally
         independent institution (Case 77/69  
          Commission  v  
          Belgium  [1970] ECR 237, paragraph 15). 
         
         
         30
            
         The scope of national laws, regulations or administrative provisions must be assessed in the light of the interpretation given
         to them by national courts (see, particularly, Case C-382/92  
          Commission  v  
          United Kingdom  [1994] ECR I-2435, paragraph 36). 
         
         
         31
            
         In this case what is at issue is Article 29(2) of Law No 428/1990 which provides that duties and charges levied under national
         provisions incompatible with Community legislation are to be repaid, unless the amount thereof has been passed on to others.
         Such a provision is in itself neutral in respect of Community law in relation both to the burden of proof that the charge
         has been passed on to other persons and to the evidence which is admissible to prove it. Its effect must be determined in
         the light of the construction which the national courts give it. 
         
         
         32
            
         In that regard, isolated or numerically insignificant judicial decisions in the context of case-law taking a different direction,
         or still more a construction disowned by the national supreme court, cannot be taken into account. That is not true of a widely-held
         judicial construction which has not been disowned by the supreme court, but rather confirmed by it. 
         
         
         33
            
         Where national legislation has been the subject of different relevant judicial constructions, some leading to the application
         of that legislation in compliance with Community law, others leading to the opposite application, it must be held that, at
         the very least, such legislation is not sufficiently clear to ensure its application in compliance with Community law. 
         
         
         34
            
         In the present case, the Italian Government does not dispute that a certain number of judgments of the Corte suprema di cassazione
         lead, by deductive reasoning, to the conclusion that, in the absence of evidence to the contrary, commercial undertakings
         trading normally pass on an indirect tax by subsequent sales, in particular if it is levied throughout the national territory
         for an appreciable period without objection. The Italian Government confines itself to explaining that numerous trial courts
         do not accept such reasoning as proof of such passing on and to providing examples of taxpayers who secured repayment of charges
         contrary to Community law, since the authorities did not succeed in those cases in proving to the relevant court that the
         taxpayers had passed on those charges. 
         
         
         35
            
         The reasoning followed in the cited judgments of the Corte suprema di cassazione is itself based on a premiss which is a mere
         presumption, namely that indirect taxes are in principle passed on by subsequent  sales by economic operators where they have
         the chance. The other factors, if any, taken into account, namely the commercial nature of the taxpayer's business, the fact
         that its financial situation is not parlous and the levying of the tax in question throughout the national territory for an
         appreciable period without objection, permit the conclusion that an undertaking which has carried on its business in such
         a context has in fact passed on the charges in question only if one relies on the premiss that all economic operators act
         thus, save in special circumstances such as the absence of one or other of those factors. However, as the Court has already
         held (see  
          San Giorgio , cited above, paragraphs 14 and 15; Joined Cases 331/85, 376/85 and 378/85  
          Bianco and Girard  [1988] ECR I-1099, paragraph 17;  
          Commission  v  
          Italy , cited above, paragraph 7, and  
          Comateb and Others , paragraph 25), and for the economic reasons pointed out by the Advocate General in points 73 to 80 of his Opinion, such
         a premiss is unjustified in a certain number of situations and is merely a presumption which cannot be accepted in the context
         of the examination of claims for repayment of indirect taxes contrary to Community law.  
         
         
         36
            
         As regards the requirement, as a condition precedent to any repayment, for production of the accounting documents of the undertaking
         which is claiming repayment of charges contrary to Community law, the following considerations must be taken into account.
         
         
         
         37
            
         Such a requirement, concerning the years for which repayment is claimed, which is raised during the period for which the accounting
         documents in question must obligatorily be preserved, cannot be regarded in itself as reversing, to taxpayers' disadvantage,
         the burden of proof that the charges have not been passed on to third parties. Such documents provide neutral factual information
         from which, in particular, the authorities may try to show that the charges have been passed on to others (see, to that effect,
         Case C-147/01  
          Weber's Wine World and Others  [2003] ECR I-11365, paragraph 115). In that situation, and in the absence of special circumstances upon which the claimant
         could rely, failure to produce accounting documents when they are requested by the authorities can be regarded by them or
         by the courts as a factor to be taken into account in showing that the charges have been passed on to third parties. However,
         that factor cannot, by itself, be sufficient for it to be presumed that those charges have been passed on to third parties
         nor,  
          a fortiori , to impose on the claimant the onus of rebutting such a presumption by proving the contrary (see, to that effect,  
          Weber's Wine World and Others , cited above, paragraph 116). 
         
         
         38
            
         In any event, in situations where the authorities seek the production of those documents after the expiry of their statutory
         preservation period and the taxpayer fails to produce them, the fact of drawing the conclusion therefrom that the taxpayer
         has passed on the charges in question to third parties or of drawing the same conclusion subject to the taxpayer proving the
         contrary amounts to establishing to the taxpayer's disadvantage a presumption which results in making excessively difficult
         the exercise of the right to repayment of charges contrary to Community law. 
         
         
         39
            
         In relation to the fact that the authorities consider that the passing on of a charge to third parties is established if the
         amount of that charge has not been accounted for, from the year of its payment, as a payment to the public purse for undue
         tax, and credited as an asset in the balance-sheet of the undertaking seeking its repayment, it must be held as follows. 
         
         
         40
            
         Such reasoning leads to the establishment of an unjustified presumption to the claimant's disadvantage. In view of the conditions
         in which a claim for repayment of a charge occurs, to add the amount of that charge as an asset to the balance sheet for the
         year of its payment assumes that the taxpayer immediately considers that it has a high chance of successfully disputing its
         payment, although, under the very terms of Article 29(1) of Law No 428/1990, it has a period of several years to bring such
         claim. Furthermore, the taxpayer may very well, even while challenging the payment of the charge, consider its chances of
         success insufficiently sure to take the risk of accounting for the corresponding amount as an asset. In that regard, in view
         of the difficulties of obtaining a favourable outcome to a claim for repayment in the circumstances revealed in this case,
         such an entry could even be alleged to be contrary to the principles of lawful accounting. In addition, to consider that the
         passing on of the charge to third parties is established on the ground that its amount has not been added as an asset to the
         balance sheet already depends on the presumption that indirect taxes are usually passed on by subsequent sales, a presumption
         which has been declared to be contrary to Community law in the course of the consideration of the first aspect criticised
         by the Commission. 
         
         
         41
            
         In the light of the foregoing considerations, it must be declared that, by failing to amend Article 29(2) of Law No 428/1990,
         which is construed and applied by the administrative authorities and a substantial proportion of the courts, including the
         Corte suprema di cassazione, in such a way that the exercise of the right to repayment of charges levied in breach of Community
         rules is made excessively difficult for the taxpayer, the Italian Republic has failed to fulfil its obligations under the
         EC Treaty. 
         
         Costs
         42
            
         Under Article 69(2) of the Rules of Procedure, the party who has been unsuccessful is to be ordered to pay the costs if they
         have been claimed in the other party's pleadings. In this case, the Italian Republic has been unsuccessful and the Commission
         has claimed an order for its costs. That Member State must therefore be ordered to pay the costs. 
         
         On those grounds, 
         
         
         
            
            THE COURT (Full Court)
         
         
         hereby:  
         
            
            1.
             Declares that, by failing to amend Article 29(2) of Law No 428 of 29 December 1990 entitled  
            Disposizioni per l'adempimento di obblighi derivanti dall'appartenenza dell'Italia alle Comunità europee (legge comunitaria
            per il 1990) (Provisions for the fulfilment of obligations deriving from Italy's membership of the European Communities (Community law
            for 1990)), which is construed and applied by the administrative authorities and a substantial proportion of the courts, including
            the Corte suprema di cassazione (Italy), in such a way that the exercise of the right to repayment of charges levied in breach
            of Community rules is made excessively difficult for the taxpayer, the Italian Republic has failed to fulfil its obligations
            under the EC Treaty;
            
            
            2.
              Orders the Italian Republic to pay the costs. 
            
            
                  Skouris
               
               
                  Jann 
               
               
                  Timmermans 
               
            
                  Gulmann
               
               
                  Cunha Rodrigues 
               
               
                  Rosas 
               
            
                  Edward
               
               
                  La Pergola 
               
               
                  Puissochet 
               
            
                  Schintgen
               
               
                  Macken 
               
               
                  Colneric 
               
            
                  von Bahr 
               
               
                  
               
               
                  
               
            
            
            
            
            
            
            
            
         
         
         Delivered in open court in Luxembourg on 9 December 2003. 
         
         
         
         
                  R. Grass 
               
               
                  V. Skouris  
               
            
         
         
         
                  Registrar
               
               
                  President
               
            
      
      
          1 –
            
             Language of the case: Italian.