C-61/79

AMMINISTRAZIONE DELLE FINANZE DELLO STATO v DENKAVIT ITALIANA

5. The duty of the authorities of a because they were incompatible with Member State to repay to taxpayers Community law does not constitute who apply for such repayment, in an aid within the meaning of Article accordance with national law, charges 92 of the EEC Treaty. or dues which were not payable

In Case 61/79

REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunale Civile e Penale, Milan, for a preliminary ruling in the action pending before that court between

AMMINISTRAZIONE DELLE FINANZE DELLO STATO

and

JUDGMENT OF 27. 3. 1980 — CASE 61/79

JUDGMENT

Facts and Issues

The facts and the arguments of the 3. Taking the view that the dispute parties put forward during the written raised problems of the interpretation of procedure may be summarized as Community law, the Tribunale Civile e follows : Penale, Milan, requested the Court of Justice by order of 1 March 1979 to give a preliminary ruling on the following questions:

AMMINISTRAZIONE DELLE FINANZE DELLO STATO v DENKAVIT ITALIANA

4. The order for reference was received 127 and 128/79 (Amministrazione delle at the Court on 13 April 1979. Written Finanze dello Stato v S.r.l. Meridionale observations were submitted in ac- Industria Salumi, Fratelli Vasanelli and cordance with Article 20 of the Protocol Fratelli Ultrocchi). on the Statute of the Court of Justice of the EEC by the defendant in the main The questions referred to the Court in action, represented for this purpose by Joined Cases 66, 127 and 128/79, like Messrs Giovanni Maria Ubertazzi and those referred to the Court in Case Fausto Capelli, Advocates at the Milan 61/79, essentially concern the same Bar, by the Italian Government, problem, although they refer to different represented for this purpose by Mr provisions of the Treaty, in this instance Adolfo Maresca, Ambassador, assisted to Article 177 in Joined Cases 66, 127 by Mr Arturo Marzano, Avvocato dello and 128/79 and to Articles 13 and 92 in Stato, by the Danish Government, Case 61/79, that is, the problem whether represented for this purpose by Mr Per a provision of Community law must be Lachmann and by the Commission of the applied to events prior to a judgment of European Communities, represented for the Court of Justice, adhering to the this purpose by Mr Sergio Fabro, interpretation given by the Court. Member of the Service, acting as Agent. The question of principle raised in the After hearing the report of the Judge- two groups of cases in question has Rapporteur and the views of the already been mentioned in Case 33/76, Advocate General, the Court decided to REWE-Zentralfinanz eG and REWE- open the oral procedure without there Zentral AG v Landwirtschafiskammer fiir being any need for a preparatory inquiry. das Saarland [1976] ECR 1989, at least as regards the duty to repay sums levied but not owed. In the judgment in the REWE Case delivered in 16 December II — W r i t t e n o b s e r v a t i o n s s u b - 1976 by the Court it was not however m i t t e d u n d e r A r t i c l e 20 of necessary to give a ruling on the question t h e P r o t o c o l on t h e S t a t u t e which is expressly put before it in this of t h e C o u r t of J u s t i c e of case. the EEC

According to the Italian Government, they previously considered they were not the criteria laid down in the Defrenne entitled when a judgment of the Court case are also decisive in cases such as this shows that in fact those sums were one. Although the limitation of the direct legally payable. effect of Article 119 was decided only for reasons of expediency, the acknow- ledgement of a right to the repayment of sums paid at a time when it was not As regards the first case, it might be established that they were charges having considered that a solution could easily be an effect equivalent to customs duties but found if reference were made to the when, on the contrary, it was generally provisions in each national legal order accepted that they were not of that governing the condictio indebiti. This nature, would be incompatible not only reference to national law would however with the objectives of Article 13 (2) of result in different solutions since the the EEC Treaty but also with those of possibility of repayment might even be secondary Community law by reason of totally excluded by national legislation, the additional adverse effect on intra- as shown by the judgment of 26 June Community trade which would result 1979 (Case 177/78, Pigs and Bacon from this. Commission v McCarren and Company Limited).

AMMINISTRAZIONE DELLE FINANZE DELLO STATO v DENKAVIT ITALIANA

work has not yet been completed as regards the six old Member States although the transitional period expired several years ago and it has only just The Italian Government also maintains been started as regards the taxation of that there is a difference between the the new Member States. right of an individual not to pay a charge having an equivalent effect which arises from a directly applicable Community provision and the duty of repayment of the State resulting not from the directly applicable provision but rather from the With regard to the common agricultural situation in which it has been found that policy, the regulations provided directly a State has "failed to fulfil its obligations that the levying of charges having an under the Treaty". It claims that the

It also argues from Memoradum No 75425312 of the Commission of 30 May 1975 issued as a result of the judgment The Italian Government emphasizes the delivered on 12 November 1974 in Case irresolution of the services of the 34/74 (Société Roquette Frères v French Commission and the fact that it was State [1974] ECR 1217) on the interpre- necessary for the Court of Justice to tation of Article 4 a (2) of Regulation specify through a uniform development No 974/71 of the Council.

It follows logically that a charges having an equivalent effect, different criterion cannot be used within otherwise it would be nessessary to the context of the same legal relationship consider that every customs official and by reference to the same provision

according to whether certain sums must in question were paid and levied in the be recovered or repaid by the national general and obvious belief that there was authorities. Thus the duty of repayment no breach of the Community rules. should not necessarily be considered as These arguments are particularly relevant - the consequence of the levying of sums as regards the system of public health not owed. inspection dues because of the complexity of the latter. It was not until 1970 when the Community rules on the common organization of the markets in the sector of the various products subject to public health inspections had already been in force several years that the The Italian Government emphasizes that Commission took action against two the solution which it proposes is based Member States only; that action had no on the judgment delivered in Case 43/75 concrete results for approximately seven (the Defienne case, quoted above) in years and was only resumed after the which the Court expressly, although by various judgments delivered by the Court way of exception, makes a distinction of Justice. between the finding that there has been a failure by a Member State to fulfil its obligations under the Treaty and the duty retroactively to eliminate the harmful effects produced by that failure to fulfil its obligations. The reasons which led the Court to depart from the — Passing on the charge in question purely declaratory effect of its judgments, in other words the economic consequences, the conducts of the Member States, the absence of action by the Commission and the incorrect impression of the effect of the applicable The Italian Government then emphasizes Community rules, are also valid as that the repayment of the sums paid to regard charges having an effect the European Communities or to the equivalent to customs duties and, in Member States as a result of a misin- general, in the case of sums levied in the terpretation of the Community rules basis of a misinterpretation of the results in an actual enrichment of the Community rules. traders concerned or more exactly in a higher and unforeseen profit margin because those traders have obviously passed on the corresponding amounts in the calculation of their production costs.

the burden improperly levied upon them also be relevant where it is necessary to and would cause additional damage to recover years afterwards and possibly exporters of the other Member States with irreversible damage to those who have already suffered the actual concerned customs duties which should damage of a reduction in their export have been levied. Arguments to this transactions. According to the Italian effect may be deduced from the above- government, the retroactive elimination mentioned memorandum of the of a difference in treatment which in fact Commission and from the provisions of has already irreversibly affected business certain proposals for regulations already relationships by making them subject to a submitted in this connexion by the system different from that intended by Commission. The general belief of the Community legislature produces an traders and of the customs authorities effect contrary to the objectives of the might also be taken into consideration Community provisions, in other words since in this case only the charges free movement of goods on the considered as payable according to the Community territory and a system of misinterpretation were taken into free competition between the traders consideration by the traders in question concerned. It is therefore necessary to for the purposes of passing on the acknowledge the relevance of the corresponding costs to third parties and principle cessante ratione legis, cessat et of fixing their prices. According to the ipsa lex and not to apply Community Italian Government, the principle of the provisions which are incompatible with protection of legitimate expectation the objectives pursued. cannot however justify this solution because, first, the Member States are not under a duty of correct interpretation which is wider than or different from that imposed on any other person to whom the law applies, secondly, it is impossible to envisage any legal duty imposed on the trader concerned to abide by an interpretation, on the assumption that it is incorrect, and, As regards the analogous but converse thirdly, the principle of the protection of case in which the misinterpretation of the legitimate expectation cannot be called in Community rules has not given rise to aid in relation to the application of the levying of duties which were, on the provisions which have the same contrary, payable, it is, according to the mandatory force as regards both Italian Government, certainly more Member States and individuals. difficult to consider the arguments which it put forward in relation to the first case to be relevant. There is a fundamental difference in that the levying of sums payable which have not however been paid and levied by mistake is in accor- dance with the function and objectives of the rules interpreted incorrectly and because the administration's mistake constitutes precisely the normal and In conclusion, the Italian Government necessary condition for the claim for proposes that the Court should rule that additional payment. However, it cannot in the Community legal order the duty be excluded a priori that the principle of of repayment and the duty to recover cessante ratione legis, cessat et ipsa lex may sums which have not been levied does

not necessarily correspond to the right C — Observations of the defendant in not to pay them and to the duty to levy the main action (Denkavit Italiana them and that the correct retroactive S.r.l.) application of the Community rules cannot be required where a general misinterpretation common to both (a) Preliminary observations parties to the legal customs relationship has given rise medio tempore to payments not owed or to the failure to levy sums The defendant in the main action payable, except as from the dates on (Denkavit) recalls first of all that the which the Community rules were argument put forward by the Italian interpreted authoritatively and the authorities has already been put forward aspects of the conflict between those in Case 33/76 (the REWE case), which rules and the provisions of national law gave rise to the judgment of the Court of were settled authoritatively. Justice of 16 December 1976, [1976] ECR 1989. This argument was criticized in the opinion delivered by the Advocate General and rejected by the Court by B — Observations of the Danish implication. The facts in Case 33/76 are, Government moreover, different from those in the present case because in the REWE case the action for repayment of sums paid The Danish Government draws attention but not owed was out of time pursuant to the link between this case and Case to the rules of national law (German law 68/79 (the Just case) which is also in that instance), which is not so in this pending before the Court. In the latter case, to which the rules of Italian law case, the question is whether Community apply in this connexion. law contains rules which may usefully be applied to the repayment of charges levied in breach of Article 95 of the EEC The defendant in the main action also Treaty and whether it is important for observes, on the one hand, that it is not the trader to be able to show that he has contested in the present case that the suffered damage. In this respect the charge in question constitutes a charge Danish Government observes that having an effect equivalent to customs Danish law does not provide for special duties and, on the other, that Article 13 procedural time-limits for repayment (2) of the EEC Treaty and the provisions whereas, on the other hand, it contains a of the agricultural regulations on the rule according to which repayment is abolition of charges having an equivalent only permitted with regard to persons effect, as regards intra-Community who have suffered damage. imports, are provisions which are directly applicable by the end of the transitional period at the latest. The Danish Government considers that Community law intends that it should in principle be possible to claim the repayment of charges levied in breach of (b) Observations on the substance of the Community law. The detailed rules for case that possibility, in particular as regards repayment to persons who have not suffered damage because it has been According to the defendant in the main passed down the line, come however action, the arguments put forward by the within the scope of national law. Italian Government and the reply which

3. In the judgment in the REWE case 1. The possible limits of the direct effect (quoted above), the Court stated with of Article 13 of the Treaty regard to Article 13 (2) of the Treaty that, applying the principle of co- operation laid down in Article 5 of The point of view put forward by the the Treaty, it was the national courts Italian Government would have the which were entrusted with ensuring result of limiting the direct effect of the legal protection which citizens Article 13 (2) on the abolition of charges derive from the direct effect of the having an equivalent effect during the provisions of Community law. Thus transitional period and of the analogous the Court intended to permit the provisions of the agricultural regulations. application of Article 13 (2) of the This argument should be firmly rejected Treaty by the national court even for the following reasons: before any action which might have been taken by the Community institutions. 1. The interpretative judgments of the Court of Justice on the direct effect of the Community provisions abolishing charges having equivalent Although it follows from the case-law of effect, in particular the judgment of the Court quoted above that citizens the Court of 14 December 1972 (Case derive from the rules of the Treaty which 29/72, S.p.A. Marimex v Italian have direct effect — in the present case Finance Administration [1972] ECR Article 13 (2) of the Treaty — rights 1309), have always stated that those which the national courts must protect, it provisions had direct effect as from is necessary to clarify the content of the date fixed for the abolition of those rights. This raises the question charges having an equivalent effect whether the fact, which is not in dispute, even where the pecuniary charge in that individuals have the right to oppose question has not yet previously been any attempt to impose upon them the declared illegal by a judgment of the payment of charges having an effect Court on the basis of Article 169 of equivalent to customs duties necessarily the Treaty or by a Commission implies a personal right for individuals to directive adopted on the basis of the repayment of the sums which have Article 13 (2) of the Treaty'. been improperly levied.

the repayment of charges having an that repayment cannot be ruled out by equivalent effect which have been Article 92 of the EEC Treaty. In fact, improperly levied by the State. On the relying upon the judgment of the Court one hand, the detailed rules laid down of 22 March 1977 Iannelli & Volpi S.p.A. on repayment by the national rules v Ditta Paolo Aleroni [1977] ECR 557), cannot be less favourable than those the defendant in the main action relating to the repayment of sums considers that it is impossible to attribute improperly levied by the State in breach to Article 92 of the Treaty a meaning of national legislation. The Italian legal contrary to that given to Article 13 (2). order, providing that the general rule of Moreover, even if one wished to accept civil law relating to the recovery of sums for the moment that the right of an improperly levied is applicable, even for individual to the repayment of charges the purpose of obtaining from the State having an equivalent effect paid but not the repayment of sums levied by way of owed is not based on Article 13 (2) of tax where there is no power to impose a the EEC Treaty, the illegal levying of a tax — cannot therefore refuse the charge having equivalent effect is in any repayment of charges having an case an event giving rise to the duty of equivalent effect which have been repayment according to the general improperly levied according to principles of condictio indebiti and of Community law. unjust enrichment which are known not only in the Community legal order but constitute general principles common to On the other hand, the detailed rules all the Member States and which, as and time-limits cannot make it such, also form an integral part of the impossible in practice to exercise rights Community legal order. which the national courts are under a duty to protect. It follows by an argument de minori ad majus based on It is clear that the repayment of charges the judgment in Case 33/76 (the REWE which have been improperly levied case) that any solution which entirely cannot constitute an aid within the excludes the exercise of those rights is meaning of Article 92 because that incompatible with Article 13 of the EEC repayment does not involve a reduction Treaty. The argument put forward by in the resources of the State but simply the Commission in Case 33/76, the performance of a Community according to which Article 13 (2) is a obligation. Nor does this repayment provision which ¡s insufficient to constitute a benefit for Community establish the right of an individual to the importes but merely makes good a loss repayment of sums which have been which those importers suffered at the improperly levied by the Member States date of the payment of the charge having — seems to be incorrect or obsolete. an effect equivalent to customs duties which was not owed.

from being classified as constituting a the present case the Court has already charge having equivalent effect. An established on the one hand that it is a importer might moreover in his turn have charge having an equivalent effect and proceedings brought against him by his on the other that Article 13 (2) of the purchasers within the context of an Treaty is directly applicable as from the action for repayment of sums paid but end of the transitional period. After not owed or for unjust enrichment. In 1 January 1970 it was therefore no fact, in the case of the public health longer necessary to have recourse to a charges applied to the products in directive for the purpose of fixing the question, those charges are only imposed timetable for the abolition of charges on imported products and an importer having an equivalent effect. cannot therefore pass on that charge except where the price of the product is — The problem relating to the sufficiently lower than that of the possibility of the trader's having

An exami- REWE case) which gave rise to the nation of the present situation in the judgment of 16 December 1976, [1976] various Member States shows that the ECR 1989, the Commission considers repayment of sums paid but not owed is that it is impossible to compare a automatic in all those States with the situation such as that in Case 43/75 (the exeption of Denmark, where it is Defrenne case, quoted above), which possible for reasons of natural justice and involves fundamental interests of private legal certainty to set up against the party individuals misled by the attitude both of claiming repayment of the ' sum in the various Member States and of the question the duty to show that he has Community institutions and whose not passed on that sum. financial resources may be limited, with the situation forming the subject-matter Examining the argument based on the of this case which, on the contrary, distortion and discrimination which involves the public administration of result from the differences between the

In fact in Member State to determine the pro-

Analysing the concept of aid, the Commission considers, on the contrary, that that reimbursement does not come Ill — Oral procedure within the scope of Article 92 of the Treaty. The Court specified in the judgment of 23 February 1961 (Case 30/59, De Gezamenlijke Steenkolen- At the hearing on 25 October 1979 the mijnen in Limburg v High Authority of Italian Government, represented by A. the European Coal and Steel Community Marzano, Avvocato dello Stato, the [1961] ECR 1) that the concept of aid is defendant in the main action, wider than that of a subsidy in that it represented by G. M. Ubertazzi, assisted embraces not only positive benefits in by F. Capelli, both of the Milan Bar, and cash or in kind but also all interventions the Commission of the European which, in various forms, mitigate the Communities, represented by S. Fabro, a charges in the budget of the undertaking member of its Legal Department, which it should in principle bear. presented oral argument. According to the Commission, this case-law implies that the State must The Advocate General delivered his voluntarily pay the aid in question by opinion on 9 January 1980.

AMMINISTRAZIONE DELLE FINANZE DELLO STATO v DENĶAVIT ITALIANA

Decision

1 By order of 1 March 1979, which was received at the Court Registry on 13 April 1979, the Tribunale Civile e Penale, Milan, referred to the Court under Article 177 of the EEC Treaty two questions on the interpretation of Articles 13 (2) and 92 of the EEC Treaty in relation to the right for taxpayers to obtain a refund of national charges incompatible with Community law which they have previously paid.

4 In essence they concern the existence and scope of the duty of Member States which have levied national charges or dues which have subsequently been held to be incompatible with Community law to refund them at the request of the taxpayer.

5 In its written observations, the Italian Government emphasizes the serious financial difficulties for the Member States which would arise from the duty to repay traders national charges and dues which have been levied and paid in the common belief that they were in accordance with Community law when, after a period of sometimes several years, an interpretation of Community law given by the Court of Justice under Article 177 of the Treaty shows the authorities and the national courts an incompatible feature which was not evident and prompts them, by virtue of the fact that Community law takes precedence, to refuse to apply the national provisions in question.

6 This is particularly so as regards a large number of charges, in particular public health inspection charges, which are levied at frontiers and whose effect equivalent to that of a customs duty prohibited by the Treaty has only gradually become clear within the context of the interpretation of that concept given by the Court of Justice. The Commission itself has realized that periods considerably longer than those originally provided for, in other words the end of the transitional period, were required for the purpose of bringing to light more than 500 types of due and ascertaining whether or not they were in the nature of charges having an effect equivalent to customs duties.

9 These considerations lead the Italian Government to the conclusion that it is necessary to recognize the existence of a general principle of Community law according to which the refunding of sums levied by way of duties which have been held to have an effect equivalent to customs duties may only be permitted with regard to amounts which have been levied after the judgment of the Court of Justice which has classified the type of charge in question as a charge having equivalent effect. The need for a principle of that nature has moreover, it claims, been recognized by the Court of Justice in its judgment of 8 April 1976 in Case 43/75 (Gabrielle Defrennev Société Anonyme Belge de Navigation Aérienne Sabena [1976] ECR 455); the result thereof is to consider that the right of individuals not tö pay the charge having equivalent effect and the duty of the Member State which has failed to fulfil its obligations under the Treaty to refund that charge after it has been levied do not necessarily correspond.

n The questions which have been raised and which are closely inter-related concern the scope of two provisions of the Treaty, Article 13 (2) and Article 92. They ask what the effect of those provisions is on the right of subjects to claim the repayment of national charges and on the related duty of Member States to repay them if two conditions laid down by the national court have been fulfilled together or separately, in other words: (a) where the fact that those national charges are in the nature of charges having an , effect equivalent to customs duties on imports and are consequently incompatible with the prohibition laid down in Article 13 (2) has been established, after the end of the transitional period, only as a result of an interpretation given by the Court of Justice under Article 177 of the Treaty and (b) where the trader who paid those charges has transferred the burden thereof to the purchasers of the imported products.

i2 Before examining the reply which must be given to the questions asked it is necessary to point out that the Court of Justice ruling under Article 177 of the EEC Treaty does not hold that a given national charge is incompatible with Community law or that there is a corresponding prohibition on levying that charge in a particular case. Within the context of the judicial co- operation established by that provision it is for the national courts, applying the fundamental rule that Community law takes precedence, to uphold the rights of subjects based, under the Treaty itself, on the direct effect of the prohibition on charges having an effect equivalent to customs duties when disputes are brought before them by those concerned. It is necessary to reply to the questions asked taking that fact into account.

is Article 177 of the Treaty provides that the Court of Justice shall have jurisdiction to give preliminary rulings, in particular, concerning the in- terpretation of the Treaty and of acts of the institutions. The purpose of that jurisdiction is to ensure the uniform interpretation and application of Community law, and in particular the provisions which have direct effect, through the national courts.

i6 The interpretation which, in the exercise of the jurisdiction conferred upon it by Article 177, the Court of Justice gives to a rule of Community law clarifies and defines where necessary the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its coming into force. It follows that the rule as thus interpreted may, and must, be applied by the courts even to legal relationships arising and established before the judgment ruling on the request for interpretation, provided that in other respects the conditions enabling an action relating to the application of that rule to be brought before the courts having jurisdiction, are satisfied.

i7 As the Court recognized in its judgment of 8 April 1976 in Case 43/75, Gabrielle Defrenne v Société Anonyme Belge de Navigation Aérienne Sabena [1976] ECR 455, it is only exceptionally that the Court may, in application of the general principle of legal certainty inherent in the Community legal order and in taking account of the serious effects which its judgment might have, as regards the past, on legal relationships established in good faith, be moved to restrict for any person concerned the opportunity of relying upon the provision as thus interpreted with a view to calling in question those legal relationships.

20 In the same way, in its judgment of 16 June 1966 in Joined Cases 52 and 55/65, Federal Republic of Germany v Commission of the European Communities [1966] ECR 159, the Court rejected the argument that administrative dues may escape the concept of charge having an equivalent effect because they represent the consideration for a specific service provided by the administration. In its judgment of 10 December 1968 in Case 7/68, Commission of the European Communities v Italian Republic [1968] ECR 423, the Court confirmed that interpretation with regard to charges on Italian works of art and, in its judgment of 1 July 1969 in Case 24/68, Commission of the European Communities v Italian Republic [1969] ECR 193, with regard to statistical levies. Finally, in its judgment of the same date in Joined Cases 2 and 3/69, Sociaal Fonds voor de Diamantarbeiders v S.A. Ch. Brachfeld and Sons and Chougol Diamond Co. [1969] ECR 211, the Court stated that the concept of a charge having equivalent effect referred to in Articles 9 and 12 of the EEC Treaty includes any pecuniary charge, other than a customs duty in the strict sense, imposed on goods circulating within the Community by reason of the fact that they cross a frontier, in so far as such charges are permitted by a specific provision of the Treaty without it being necessary moreover to take into account the fact that the charge in question had social security objectives.

AMMINISTRAZIONE DELLE FINANZE DELLO STATO v DENKAVIT ITALIANA

2i It follows from this settled case-law that both the Member States and the traders concerned were, since before the end of the transitional period, in other words before the date on which the prohibition was generally and unconditionally effective under Article 13 (2) of the EEC Treaty, sufficiently informed of the scope of that prohibition for it to have been unnecessary to restrict its scope, in any case as regards the period after 1 January 1970.

JUDGMENT OF 27. 3. 1980 — CASE 61/79

25 It follows from the judgments of 16 December 1976 in the REWE and Comet cases, supra, that, applying the principle of co-operation laid down in Article 5 of the EEC Treaty, it is the courts of the Member States which are entrusted with ensuring the legal protection which subjects derive from the direct effect to the provisions of Community law. In the absence of Community rules concerning the contesting or the recovery of national charges which have been unlawfully demanded or wrongfully levied, it is for the domestic legal system of each Member State to designate the courts having jurisdiction and determine the procedural conditions governing actions at law intended to safeguard the rights which subjects derive from the direct effect of Community law, it being understood that such conditions cannot be less favourable than those relating to similar actions of a domestic nature and that under no circumstances may they be so adapted as to make it impossible in practice to exercise the rights which the national courts are bound to protect.

26 It should be specified in this connexion t h a t the protection of rights g u a r a n t e e d in the m a t t e r by the C o m m u n i t y legal o r d e r does n o t require the g r a n t of an o r d e r for the recovery of charges improperly levied granted in conditions such as w o u l d involve an unjustified e n r i c h m e n t of those entitled. T h e r e is therefore nothing, from the point of view of C o m m u n i t y law, to prevent national courts from taking a c c o u n t in a c c o r d a n c e with their national law of the fact that it has been possible for charges unduly levied to be i n c o r p o r a t e d in the prices of the u n d e r t a k i n g liable for the charge and to be p a s s e t r o n to the purchasers.

(c) There is nothing from the point of view of Community law to prevent national courts from taking account, in accordance with their national law, of the fact that it has been possible for charges unduly levied to be incorporated in the prices of the undertaking liable for the charge and to be passed on to purchasers.

A r t i c l e 92 of t h e T r e a t y

29 By referring in its questions to Article 92 of the Treaty, the national court asks in substance whether the passing on by traders of national charges improperly levied in the conditions described by that court should not be considered to be an aid within the meaning of Article 92 of the Treaty and therefore incompatible with Community law.

JUDGMENT OF 27. 3. 1980 — CASE 61/79

30 Under Article 92 (1), "any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in as far as it affects trade between Member States, be incompatible with the Common Market".

3i This provision thus refers to the decisions of Member States by which the latter, in pursuit of their own economic and social objectives, give, by unilateral and autonomous decisions, undertakings or other persons resources or procure for them advantages intended to encourage the attainment of the economic or social objectives sought. It does not apply to a duty to pay or repay sums which are caused by the fact that those sums were not payable by the person who paid them. It follows from this that a national tax system which enables the taxpayer to contest or claim repayment of tax does not constitute an aid within the meaning of Article 92 of the Treaty. Whether or not it is possible to recover tax because of that fact depends in fact upon the characteristics of the national legislation on the recovery of sums paid but not owed, in particular in the tax field.

in answer to the questions referred to it by the Tribunale Civile e Penale, Milan, by order of 1 March 1979, which was entered on the Court Register on 13 April 1979, hereby rules:

1. (a) The direct effect of Article 13 (2) of the EEC Treaty implies that, from the end of the transitional period, applications directed against national charges having an effect equivalent to customs duties or claims for repayment of such charges may, according to the circumstances, be brought before the authorities and courts of the Member States, even in respect of the period before that classification of those charges follows from an interpretation given by the Court of Justice under Article 177 of the Treaty.

(b) It is for the legal order of each Member State to lay down the conditions in which taxpayers may contest that taxation or claim repayment thereof, provided that those conditions are no less favourable than the conditions relating to similar applications of a domestic nature and that they do not make it impossible in practice to exercise the rights conferred by the Community legal order.

(c) There is nothing from the point of view of Community law to prevent national courts from taking account, in accordance with their national law, of the fact that it has been possible for charges unduly levied to be incorporated in the prices of the undertaking liable for the charge and to be passed on to purchasers.

OPINION OF MR REISCHL — CASE 61/79

2. The duty of the authorities of a Member State to repay to taxpayers who apply for such repayment, in accordance with national law, charges or dues which were not payable because they were incompatible with Community law does not constitute an aid within the meaning of Article 92 of the EEC Treaty.

1 — Translated from the German.