C-57/65
ECLI:EU:C:1966:34
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JUDGMENT OF THE COURT 16 JUNE 19661
Alfons Lütticke GmbH v Hauptzollamt Saarlouis (Reference for a preliminary ruling by the Finanzgericht des Saarlandes)
Case 57/65
Summary
1. Member States of the EEC — Absolute obligation under the Treaty — Concept — Rights of individuals — Protection of such rights by national courts
2. Policy of the EEC — Common rules — Tax provisions — Internal taxation of one Member State imposed on the products of other Member States — Prohibition of discrimination as compared with charges on the domestic products of that State — Entry into force of this rule — Its nature and consequences — Rights of individuals — Pro tection of such rights by national courts (EEC Treaty, Article 95)
3. Deleted
4. Customs duties and internal taxation — Joint applicability to the same case ofprovisions relating thereto — Impossibility of such joint application (EEC Treaty, Articles 12, 13, 95)
5. Policy of the EEC — Common rules — Tax provisions — Internal taxation — Charges intended to offset its effect — Nature of internal taxation (EEC Treaty, Article 95)
1. Cf. para. 7, summary, Case 6/64, Rec. the Treaty only from the beginning of the 1964, p. 1145. second stage of the transitional period. 2. The first paragraph of Article 95 has 3. Deleted. direct effects and creates individual 4. Articles 12 and 13, on the one hand, and rights which national courts must pro Article 95 on the other cannot be applied tect. jointly to one and the same case. As a result of the third paragraph of 5. A charge intended to offset the effect of Article 95, the first paragraph of that internal taxation thereby takes on the Article applies to the provisions in exist internal character of the taxation whose ence at the time of the entry into force of effect it is intended to offset.
In Case 57/65
Reference to the Court of Justice under Article 177 of the EEC Treaty by the Finanzgericht des Saarlandes (Second Chamber) for a preliminary ruling in the action pending before that court between
1 — Language of the Case: German.
JUDGMENT OF 16. 6. 1966 — CASE 57/65
ALFONS LÜTTICKE GMBH of Köln-Deutz, represented by its representative ad litem, Peter Wendt, Bieberstraße 3, Hamburg 13,
plaintiff,
and
HAUPTZOLLAMT SAARLOUIS,
DEFENDANT,
THE COURT
composed of: Ch. L. Hammes, President, L. Delvaux and W. Strauß, Presidents of Chambers, A. M. Donner (Rapporteur), A. Trabucchi, R. Lecourt and R. Monaco, Judges,
Advocate-General: J. Gand
Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts and Procedure Tax Law ('Umsatzsteuergesetz') has ex empted domestic whole milk powder from The facts may be summarized as follows: the internal turnover tax. Pursuant to para On 9 October 1963, the undertaking Alfons graph 4, No 25, of the Turnover Tax Law, Lütticke GmbH, of Köln-Deutz, the plain after 30 June 1961 supplies of the basic pro tiff in the main action, requested the cus duct, that is to say, milk, were also exempt toms office, Nennig, to given customs from the turnover tax, so that the levying of clearance for 15 000 kg of whole milk the turnover equalization tax was prohib powder originating in Luxembourg. In ited under Article 95 of the EEC Treaty. granting the request, the customs office, on The Hauptzollamt (Principal Customs Of the basis of a value for customs purposes of fice) by decision of 23 January 1964, 29 815.50 DM, required the plaintiff to pay rejected the complaint as unfounded and the sums of 3 279.70 DM as customs duties the Lütticke company lodged an appeal and 1 323.80 DM as turnover equalization against this rejection with the Finanzge tax ('Umsatzausgleichsteuer'). richt des Saarlandes. The plaintiff's representative made an ad In its Order of 25 November 1965 the ministrative complaint against the second Finanzgericht took the view that the result section of that decision, alleging that the of the dispute depends, on the one hand, on turnover equalization tax demanded was whether the turnover equalization tax is an unfounded in law. Since 1 February 1956, internal tax or a charge having equivalent paragraph 4, No 20 (f), of the Turnover effect to that of customs duties and, on the
LÜTTICKE v HAUPTZOLLAMT SAARLOUIS
other hand, on whether the provisions of Documents were produced on 19 April 1966 Article 95 of the Treaty have direct effect so by the Government of the Federal Republic as to create individual rights of which na of Germany, following which the same par tional courts must take account, and it ties were heard a second time by the Court therefore stayed the proceedings and made at the hearing on 28 April 1966. a reference to the Court of Justice under The Advocate-General delivered his opin Article 177 of the Treaty in order to obtain ion at the hearing on 4 May 1966. a preliminary ruling on the questions which it formulated as follows: II — The written observations sub 1. Does the first paragraph of Article 95 of mitted to the Court pursuant the EEC Treaty have direct effect, cre to Article 20 of the Statute of ating individual rights of which the the Court of Justice national courts must take account?
If the answer to this question is in the neg The observations submitted pursuant to ative: the second paragraph of Article 20 of the Protocol on the Statute of the Court of 2. Does the third paragraph of Article 95 of the EEC Treaty in conjunction with the Justice may be summarized as follows: first paragraph of that Article have direct effect as from 1 January 1962 and create Observations submitted by the Commission individual rights of which the national of the EEC courts must take account?
If the answer to this second question is also The Commission explains that the purpose in the negative: of Article 95 et seq. is to neutralize the 3. Do the first and third paragraphs of effects of indirect taxation on competition Article 95 of the EEC Treaty in con in products of the Common Market. Ac junction with Articles 12 and 13 thereof cording to it, the turnover equalization tax have direct effect creating individual indubitably comes under Article 95 and rights of which the national courts must does not constitute a charge having equiv take account? alent effect to customs duties. The opposite This request was transmitted to the Presi conclusions which have on occasion been dent of the Court of Justice by letter of the drawn from the judgment in Joined Cases President of the Second Chamber of the Nos 2 and 3/62 fail to recognize the special Finanzgericht which was received at the features of those cases on which the judg Court Registry on 26 November 1965. ment was based. In the present case, how Pursuant to Article 20 of the Protocol on ever, the circumstances disclosed by the the Statute of the Court of Justice of the Finanzgericht cannot transform the turn EEC, written observations were lodged: over equalization tax from an internal tax — On 24 February 1966, by the Govern into a charge having an effect equivalent to ment of the Kingdom of the Nether customs duties. Such an operation would lands; separate the integral tax into two parts, of — On 26 Febrruay 1966, by the Commis which one would be considered as a charge sion of the EEC; having an effect equivalent to customs du — On 28 February 1966, by the plaintiff in ties and the other, corresponding to the the main action; indirect application of the turnover tax, — On 1 March 1966, by the Government of would be deemed to be internal taxation. the Federal Republic of Germany; With regard to the effects of Article 95, the — On 1 March 1966, by the Government of Commission considers that the first para the Kingdom of Belgium. graph entails, from the entry into force of At the oral proceedings on 24 March 1966, the Treaty, an obligation to maintain the the oral observations of the plaintiff in the status quo (stand-still), whilst the third main action, of the Commission of the EEC paragraph entails the obligation to elimi and of the Government of the Federal Re nate the existing distortions by the com public of Germany were heard. mencement of the second stage of the tran
JUDGMENT OF 16. 6. 1966 — CASE 57/65
sitional period. It considers that these pro of the Treaty has the character of a lex per visions have direct and immediate effect. fecta, it has immediate effect in its field. In The first paragraph is clear, complete and its view, Article 95 constitutes such a lex specific and does not assume further im perfecta. It endeavours to refute the argu plementing provisions either by the Mem ments which led the Finanzgericht to arrive ber States or the Community. It cannot be at the opposite conclusion. objected either that it requires interpreta Although the Finanzgericht has not raised tion or that its application is uncertain. the point, the plaintiff considers whether the These objections might be raised with re turnover equalization tax by its nature gard to many of the rules of internal law comes under Article 95. Although it states without detracting from their obligatory that this is an internal tax coming under the
nature. Nor can Article 97 be relied on, said Article, it claims that this fact does not because that provision is only applicable preclude the simultaneous application of provided that the principles of Article 95 Article 9 et seq. of the Treaty. There is are observed. nothing unusual in the simultaneous appli The Commission is of the same opinion cation of different provisions to the same with regard to the third paragraph. The facts. When the provisions concerned have mere circumstance that the present case a common purpose in related fields, such does not involve an obligation to refrain situations are indeed generally found.
In from acting, but an obligation to act is not this connexion, the judgment in Joined a reason to deny the direct effect of this Cases 2 and 3/62 showed a more realistic provision. The third paragraph is sufficient appreciation that the judgment in Case ly clear and specific and neither assumes 10/65. further acts by the Community nor leaves In cases of the simultaneous application the Member States a margin of discretion in of several prohibitions, the principle of implementing it. 'Gemeinschaftsfreundlichkeit' (compatibil ity with Community provisions) requires Observations of the plaintiff in the main that the prohibition best fitted to attain the action objectives of the Community shall prevail. The plaintiff ends by stating that neither The plaintiff regrets that the Finanzgericht domestic milk products nor the raw mate has not raised the question whether Com rials of which they are composed are subject munity law generally prevails over national to any turnover tax. law or only when it is more recent that the national law in question. It claims that in Observations of the Government of the view of the frequent amendments to legisla Federal Republic of Germany tion relating to the turnover equalization tax, the latter solution would have undesir The Federal Government restricts its ob able consequences. It consequently hopes servations to two questions which it con that, although the court making the refer siders essential to the case in question, ence has not raised the point, the Court of namely: Justice will feel itself able in this case to 1. On the direct effect of Article 95 of the give a ruling in favour of the absolute Treaty; priority of Community law. 2. On the delimitation of the respective With regard to the question whether Article fields of Articles 12 and 95. 95 creates, for nationals of Member States, With regard to the first question: it may be individual rights which the national court is deduced from the case-law of the Court that bound to protect, the plaintiff rejects the the direct effect of the provisions of the concept of 'self-executing' as inappropriate Treaty is conditional upon three require and advocates the adoption of the distinc
ments:
tion, derived from Roman law, between (a) They must relate to a prohibition, that leges imperfectae, leges minus quam per is to say, to an obligation to refrain fectae, leges perfectae and leges plus quam from acting and not to an obligation to perfectae. It alleges that since any provision act;
LÜTTICKE v HAUPTZOLLAMT SAARLOUIS
(b) It must be an unconditional obligation, ent forms of implementation and thereby and in particular it must not assume presumes the taking of measures by national measures by the Member State in ques legislatures, and the structure of Article 95 tion; itself militate against recognizing the lat (c) The obligation must be unambiguous, ter's provisions as having direct effect. so that it can be applied without sub Compliance with the third paragraph of stantial difficulty by the national courts that Article can only be assured by means of and administrations. Article 169. The Federal Government states that none With regard to Question 3: The simultaneous of these conditions is fulfilled in the case of application of Article 12 et seq. and of Article 95. Article 95 et seq. risks causing confusion It furthermore observes that the Finanzge with regard to the appropriate system for richt restricted itself to finding that supplies the abolition of discrimination. For these of milk were exempt from turnover tax as reasons, the Government considers that it from 1 July 1961, but failed to inquire at would be more expedient to consider the what rate the milk, as a basic product for turnover equalization tax and the turnover powdered milk, was taxable and what tax as a single tax falling under Article 95 of quantity of milk was necessary to produce the Treaty. a unit of powdered milk. Only after lengthy researches carried out jointly by the Federal Observations of the Government of the Government and the Commission, was the Kingdom of Belgium equalization tax reduced from 4 % to 3 %. With regard to the second question: the Fed With regard to Questions 1 and 2: The eral Government considers that a clear Belgian Government considers that the distinction must be made between customs provisions of Article 95 of the Treaty do not duties and charges having equivalent effect, create individual rights which the national which both come under Article 12 of the courts must protect. This interpretation is Treaty, and internal taxation which comes based on the actual wording of the Articles under Article 95. Even the fact that the rate in question and on the fact that compliance of the turnover tax is reduced to nil for with and implementation of the said pro certain products is not such as to deprive visions are inconceivable without the adop the turnover equalization tax of the char tion by each of the Member States of the acter of internal taxation, as is proved in appropriate measures. particular by the second paragraph of With regard to Question 3: it is observed that Article 97. Article 12 and Article 95 et seq. of the Treaty pursue similar objectives in their Observations of the Government of the related but distinct fields, so that the cu Kingdom of the Netherlands mulative application of the two types of With regard to Questions 1 and 2: both Arti provision to the same case is inadmissible. cle 97 of the Treaty, which allows for differ
Grounds of judgment
1. The first and second questions
In its first question, the Finanzgericht des Saarlandes requests the Court to rule whether the first paragraph of Article 95 of the Treaty produces direct effects and creates individual rights of which national courts must take account. If a negative answer is given to this question, the Finanzgericht asks whether, as from 1 January
JUDGMENT OF 16. 6. 1966 — CASE 57/65
1962, the third paragraph of the same Article, together with the first paragraph, produces the effects and creates the rights mentioned above.
It is necessary to consider the two questions together and first of all to clarify the relationship between the said paragraphs of Article 95.
The first paragraph of Article 95 sets forth, as a general and permanent rule of Community law that Member States shall not impose on the products of other Member States any internal taxation in excess of that imposed on similar domestic products. Such a system, often adopted by the Treaty to ensure the equal treatment of nationals within the Community under national legal systems, constitutes in fiscal matters the indispensable foundation of the Common Market. In order to facilitate the adaptation of national legal systems to this rule, the third paragraph of Article 95 allows Member States a period of grace lasting until the beginning of the second stage of the transitional period, that is to say, until 1 January 1962, to repeal or amend any 'provisions existing when this Treaty enters into force which conflict with the preceding rules'. Article 95 thus contains a general rule provided with a simple suspensory clause with regard to provisions existing when it entered into force. From this it must be concluded that on the expiry of the said period the general rule emerges unconditionally into full force.
The questions raised by the Finanzgericht must be considered in the light of the foregoing considerations.
The first paragraph of Article 95 contains a prohibition against discrimination, constituting a clear and unconditional obligation. With the exception of the third paragraph this obligation is not qualified by any condition, or subject, in its implementation or effects, to the taking of any measure either by the institutions of the Community or by the Member States. This prohibition is therefore complete, legally perfect and consequently capable of producing direct effects on the legal relationships between the Member States and persons within their jurisdiction. The fact that this Article describes the Member States as being subject to the obligation of non-discrimination does not imply that individuals cannot benefit from it.
With regard to the third paragraph of Article 95, it indeed imposes an obligation on the Member States to 'repeal' or 'amend' any provisions which conflict with the rules set out in the preceding paragraphs. The said obligation however leaves no discretion to the Member States with regard to the date by which these operations must have been carried out, that is to say, before 1 January 1962. After this date it is sufficient for the national court to find, should the case arise, that the measures implementing the contested national rules of law were adopted after 1 January 1962 in order to be able to apply the first paragraph directly in any event. Thus the provisions of the third paragraph prevent the application of the general rule only
LÜTTICKE v HAUPTZOLLAMT SAARLOUIS
with regard to implementing measures adopted before 1 January 1962, and founded upon provisions existing when the Treaty entered into force.
In the oral and written observations which have been submitted in the course of
the proceedings, three governments have relied on Article 97 in order to support a different interpretation of Article 95.
In empowering Member States which levy a turnover tax calculated on a cumula tive multi-stage tax system to establish average rates for products or groups of products, the said Article thus constitutes a special rule for adapting Article 95 and this rule is, by its nature, incapable of creating direct effects on the relationships between the Member States and persons subject to their jurisdiction. This situation is peculiar to Article 97, and can in no circumstances influence the interpretation of Article 95.
It follows from the foregoing that, notwithstanding the exception in the third paragraph for provisions existing when the Treaty entered into force until 1 January 1962, the prohibition contained in Article 95 produced direct effects and creates individual rights of which national courts must take account.
2. The third question
In its third question, the Finanzgericht requests the Court to rule whether 'the first and third paragraphs of Article 95 of the EEC Treaty in conjunction with Articles 12 and 13 thereof have direct effect creating individual rights of which the national courts must take account'.
Since this question was only raised in the event of the Court's answering the first two questions in the negative, it is unnecessary to give a reply to it. It should how ever be made clear that Articles 12 and 13 on the one hand and Article 95 on the
other cannot be applied jointly to one and the same case. Charges having an effect equivalent to customs duties on the one hand and internal taxation on the other hand are governed by different systems. In this respect it should be noted that a charge intended to offset the effect of internal taxation thereby takes on the internal character of the taxation whose effect it is intended to offset.
Costs
The costs incurred by the Government of the Kingdom of the Netherlands, by the Commission of the European Economic Community and by the Governments of the Federal Republic of Germany and of the Kingdom of Belgium, which have submitted observations to the Court are not recoverable, and as these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the Finanzgericht des Saarlandes, the decision on costs is a matter for that court.
JUDGMENT OF 16. 6. 1966 — CASE 57/65
On those grounds,
Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the plaintiff in the main action, the Commission of the European Economic Community and the Government of the Federal Republic of Germany; Upon hearing the opinion of the Advocate-General; Having regard to Articles 12, 13, 95 and 97 of the Treaty establishing the European Economic Community; Having regard to the Protocol on the Statute of the Court of Justice of the Europe an Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,
THE COURT
hereby rules:
1. The first paragraph of Article 95 produces direct effects and creates individual rights which national courts must protect;
2. As a result of the third paragraph of Article 95, the first paragraph of that Article applies to provisions in existence at the time of the entry into force of the Treaty only form the beginning of the second stage of the transitional period;
and declares that the decision on costs in the present proceedings is a matter for the Finanzgericht des Saarlandes.
Delivered in open court in Luxembourg on 16 June 1966
Hammes Delvaux Strauß
Donner Trabucchi Lecourt Monaco
A. Van Houtte Ch. L. Hammes
Registrar President