Commission of the European Communities v Italian Republic.
Date: 1998-01-29
13 In that regard it should be stated that the validity of the decision has not been challenged. However, the parties are at odds over the question whether Article 2 of the decision, which requires recovery of the tax credit in question, lays down an obligation which is absolutely impossible to perform. According to consistent case-law, the only defence available to a Member State in opposing an application by the Commission under Article 93(2) of the Treaty for a declaration that it has failed to fulfil its Treaty obligations is to plead that it was absolutely impossible for it to implement the decision properly (see, most recently, Case C-348/93 Commission v Italy [1995] ECR I-673, paragraph 16).
14 However, that condition is not satisfied where the defendant government merely informs the Commission of the legal and practical difficulties involved in implementing the decision, without taking any step whatsoever to recover the aid from the undertakings in question, and without proposing to the Commission any alternative arrangements for implementing the decision which would have enabled the alleged difficulties to be overcome (see Case 94/87 Commission v Germany [1989] ECR 175, paragraph 10, and Case C-183/91 Commission v Greece [1993] ECR I-3131, paragraph 20).
15 That is the situation in this case. It is apparent that the Italian Government made no attempt to recover the tax credit in question. Without any such step being taken, implementation of the recovery decision cannot be shown to be impossible.
16 It should, moreover, be emphasised that, although insuperable difficulties may prevent a Member State from complying with its obligations under Community law (see Case 101/84 Commission v Italy [1985] ECR 2629, paragraph 16), mere apprehension of such difficulties cannot justify a failure by a Member State to apply Community law correctly (see Case C-52/95 Commission v France [1995] ECR I-4443, paragraph 38, and Case C-265/95 Commission v France [1997] ECR I-0000, paragraph 55).
18 The Italian Republic claims, secondly, that recovery of the tax credit is also technically impossible to carry out. It would require, it says, the number of beneficiaries to be determined (around 100 000), and then each individual situation would have to be examined over one or more years (1992 and subsequent years). Then, it would be a case of checking the tax credit actually used, the allocation of the total credit used by each beneficiary to the different tax headings, preparing the documents in support of each recovery demand and the demand itself, on the basis that each department is to recover the taxes within its area of competence, both by reference to geographical territory and to the type of tax. Evidently, such a recovery procedure would involve a large number of departments scattered over the territory (tax offices, area offices, direct taxation departments, departments responsible for value added tax) and would require them to conduct checks in excess of those normally provided for and planned on the basis of their capacities. The resources devoted to such an action would seriously affect the normal capacity of those services for carrying out checks, which would prejudice the proper functioning of the tax system.
23 In that connection the Court finds that, even if recovery of the tax credit does present difficulties from an administrative point of view, that fact is not such as to enable recovery to be deemed to be technically impossible.