C-279/96

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O P I N I O N OF MR RUIZ-JARABO — JOINED CASES C-279/96, C-280/96 A N D C-281/96

ible with Community law 4 and, consequently, munity law, a time-limit which starts to that the taxes paid in respect of it had been run before the correct and complete trans- improperly levied. position into national law of the direc- tive conferring that right compatible with Community law?

5. After unsuccessfully seeking reimburse- ment of charges improperly paid from the Italian administration, the plaintiffs asked the Tribunale di Genova to order their reimburse- (2) Is it compatible with Community law to ment by the Ministero delle Finanze. In the provide a party whose rights are recog- case of Marine Insurance Consultants Srl, the nised as having been infringed, and to President of the Tribunale granted that request whom repayment of the sums claimed is by order of 21 July 1995, against which the granted, with a remedial procedure under Tax Administration appealed. which the rules as to quantum differ from, and compare unfavourably with, those laid down in respect of actions for repayment between private individuals, and are substantially determined by a measure enacted by the same State authority as that which infringed the 6. Before giving a final judgment, the Tribu- injured party's rights by failing to fulfil nale di Genova decided to refer the following its obligations?' two questions to the Court of Justice for a preliminary ruling:

The first question

'(1) Is national legislation which sets, in respect of the initiation of proceedings to safeguard a right arising under Com-

including if appropriate a special mention of 10. It is true that the scope of Emmott had or reference to the Opinion in EDIS regarding nevertheless subsequently been limited by the certain details common to both cases. Court of Justice, which emphasised that it was applicable only where the same unusual circumstances arose as in that case. In its judgments of 27 October 1993 in Steenhorst- Neeńngs, 7 and of 6 December 1994 in Johnson, 8 the Court of Justice confirmed the applicability of national limitation periods to claims for sums payable in respect of social benefits based on the application of certain directives, even where the latter had not yet 8. The national court seeks to determine the been duly incorporated into national law. compatibility or otherwise with Community law of national legislation which, for pro­ ceedings to recover taxes unduly paid, sets as the starting date for the three-year time-limit the date on which the tax was paid, at which time the Community directive applicable thereto had not been properly transposed into national law.

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OPINION OF MR RUIZ-JARABO — JOINED CASES C-279/96, C-280/96 AND C-281/96

12. Finally, two months before the hearing in described above, asked the Court of Justice this case, the Court of Justice gave its judg- 'whether Community law prevents a Member ment of 2 December 1997 in Fantask, 1 1which State from relying on a limitation period is particularly important to the present case under national law to resist actions for since the factual and legal issues were analo- recovery of charges levied in breach of the gous. Fantask was concerned with the reim- directive as long as that Member State has not bursement of charges improperly levied and properly transposed the directive'. The obser- involved: vations of the plaintiff companies and of the Commission were also based on the prece- dent set by Emmott, the application of which was opposed by the governments which sub- mitted observations to the Court of Justice.

— the same type of national charge (a Danish tax on entry of companies on the requisite register);

14. The Court of Justice again opted for the latter solution, repeating the line of reasoning to which I referred earlier. — the same kind of incompatibility with Community law (specifically, with Direc- tive 69/335) of the national provision gov- erning the charge;

15. In the first place, as a general principle, it pointed out that, in the absence of Commu- nity rules governing the matter, it is for the domestic legal system of each Member State — the same obstacle deriving from national to lay down the procedures for seeking the time-limits or limitation periods (five recovery of sums wrongly paid, provided that years, under national legislation, as from those procedures are not less favourable than the date of payment of the tax). those governing similar domestic actions and do not render virtually impossible or exces- sively difficult the exercise of rights conferred by Community law.

the interests of legal certainty which protects impossible or excessively difficult the exercise both the taxpayer and the administration, it of rights conferred by Community law'. stressed that such periods could not be regarded as rendering virtually impossible or excessively difficult the exercise of rights con- ferred by Community law even if, by defini- tion, the expiry of those periods necessarily entailed the dismissal, in whole or in part, of the action brought. Specifically, the period of five years set by Danish law was reasonable 19. In view of the clarity of that dictum and and applied without distinction to actions the clear analogy between the factual and legal based on Community law and those based on circumstances of Fantask and this case, the national law. Commission stated at the hearing that it relin- quished its earlier position and recognised that the issue had been definitively disposed of by the decision in Fantask. The plaintiffs in the main proceedings, however, endeav- oured on that occasion 12 to draw attention to features which distinguished Danish law from Italian law and made the application of Fan- 17. Third, it again rejected the application to task to their case invalid. disputes of that kind of the solution adopted in Emmott, which was justified by the par- ticular circumstances of that case, in which the time-bar had the result of depriving the applicant of any opportunity whatever to rely on her right to equal treatment under a Com- munity directive. 20. In my opinion, that endeavour failed. First, because the point of departure was wrong: rather than alleged differences between Fantask and the present case, what would have had to be proved was an analogy between the circumstances of Emmott and those of this case, since the case-law subsequent to Emmott laid stress on the singularity of the 18. Finally, the Court of Justice concluded features of that case, which determined the that 'Community law, as it now stands, does course taken. At the hearing the United not prevent a Member State which has not Kingdom Government drew attention, on this properly transposed the directive from matter, to the fact that — among other things resisting actions for the repayment of charges — it was the authorities themselves which, in levied in breach thereof by relying on a limi- that case, encouraged Mrs Emmott not to tation period under national law -which runs from the date on which the charges in ques- tion became payable, provided that such a period is not less favourable for actions based 12 — The hearing was held jointly for Cases C-231/96 EDIS, on Community law than for actions based on C-260/96 SPAC, C-279/96 Ansaldo Energia, C-280/96 Marine Insurance Consultants and C-281/96 GMB and national law and does not render virtually Others.

22. That statement — which, of course, pre- supposes the absence of any Community law provisions in this area and the existence of a provision of national law which sets the time- 24. It is true that in the exercise of that power limit in a non-discriminatory manner is thus the Member States — in this case, the Italian Republic — must act in accordance with the requirements of Article 5 of the Treaty. It is also true that certain steps taken by the Italian 13 — The lawyer acting for EDIS made this clear himself at the hearing when he recognised that as early as 1989 (and there- authorities regarding repayment of the tax fore, not only before the judgment in Ponente Carni but with which these preliminary rulings are con- also before the question disposed of by that judgment arose) another EDIS company, linked with his client, and a number cerned, as described in the parties' submis- of other Italian companies had challenged the registration tax assessment before the Italian courts. Although their sions, appear to have placed in the way of actions were dismissed, on substantive grounds, it was thus actions for repayment more difficulties than dear that they were not denied entidement to judicial pro- tection. might reasonably be expected, in the light of

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The second preliminary question In this case, however, the Avvocatura dello Stato (State Legal Service) contends, citing Article 3 of Decree-Law N o 307 of 25 March 1994, which has now been converted into Law N o 457 of 22 July 1994, that the rate to be applied is 3 per cent for each completed semester, as is usual in the case of obligations on the part of the State to make repayment. 25. The national court is not over-explicit in describing the set of national provisions as to whose compatibility with Community law it entertains the doubts which it expresses in its second preliminary question. That question, although framed in very broad terms relating If application were to be made of the to any 'remedial procedure', is in fact con- decree-law cited above, which in particular cerned with the duality of national provisions refers for the determination of the rate to an governing the charging of default interest in administrative measure which is still pending, cases where revenue unduly levied is reim- it would cause further damage to an indi- bursed. That is the inference to be drawn from vidual who has made payment. Where the the legal grounds of the order for reference. recipient public authority is held to have acted in good faith, the citizen is allowed interest on the sums in respect of which he succeeds in obtaining a repayment order only as from 14 — Amongst others, the need to commence legal proceedings to obtain a right enforceable against the revenue authorities, a the date on which he instituted proceedings requirement which may also involve an unjustified increase in respect of his claim, such interest being in litigation — and, incidentally, a delay in the administra- tion of justice — to the detriment of tax payers. reduced, moreover, to the extent determined 15 — Article61 of Decree-Law N o 331 of 30 August 1993 lays down the procedure for reimbursement of sums unduly paid by that public body, which has failed to fulfil in respect of this tax, either by an administrative complaint its obligation to transpose the Community procedure (for sums paid in respect of the 1992 tax year) or by means of set-off (for those paid in respect of 1993). directive into national law.

32. The fact that those provisions lay down, for debts of and claims against the revenue authorities, rates of default interest different 29. In fact, Article 3 of Decree-Law N o 307 from those applicable to relations between of 23 May 1994 (subsequently converted into private persons lies at the heart of the second Law N o 457 of 22 July 1994) which, as from its entry into force, 16 authorised the Minister 17 — The laws and decree-laws governing the interest rates in question have undergone numerous changes over recent years, obviously as a result of changes in rates on the mon- 16 — 1 January 1995. etary and financial markets.

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question, construed in accordance with the tions cannot be less favourable than those considerations set out in the order for refer- relating to similar actions of a domestic nature, ence. I must examine this point further. and may not make it impossible in practice to exercise rights which the national courts have a duty to protect.' 22

33. As regards exercise of the right to secure repayment of tax paid but not due, where it derives from the incompatibility of the domestic tax with Community law, settled case-law, starting with the judgments in Rewe 18 and Comet, 19 has laid stress both on 35. Like all the Member States which have the obligation of the Member States to refund submitted observations in this case, I see n o those payments, reflecting the right of tax- reason whatever to prevent a national legis- payers to have them repaid, 20 and on the fact lature from making actions for the recovery that the exercise of that right is subject to the of wrongly levied taxation subject to condi- usual conditions applicable within the legal tions different from those governing similar order of each State. actions between private individuals.

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OPINION OF MR RUIZ-JARABO - JOINED CASES C-279/96, C-280/96 AND C-281/96

acknowledged the viability of the two sets of 38. Those conditions apply both to the prin- national rules most prevalent in this area: cipal obligation of repaying the sum unduly levied and to the incidental obligation of paying interest thereon. The latter obligation must thus also be governed by the national provisions applicable to this matter, applied — In certain cases, national laws make objec- without distinction to claims originating in tions or claims for the refund of taxes ille- domestic law or in Community law. gally levied subject to specific procedural conditions and time-limits with regard both to complaints submitted to the tax authorities and to legal proceedings.

39. The Court of Justice expressly confirmed this in its judgment of 12 June 1980 in Express — In other cases, claims for repayment of Dairy Foods: 24 in the absence of provisions taxes paid but not due must be brought of Community law on this point it is for the before the ordinary courts, in particular in national authorities, and particularly for the form of claims for the refunding of national courts, in cases concerning the sums paid but not owed. Such actions are recovery of charges improperly imposed, to available for varying lengths of time, in settle all ancillary questions relating to such some cases for the limitation period laid reimbursement, such as the payment of down under the general law. interest, by applying their domestic rules regarding the rate of interest and the date from which interest must be calculated.

principle of Community law requires it for to the origin — national or Community — of such purposes to treat tax relations in the the obligation to reimburse. That would be same way as relations inter privatos. the case if the rates applicable to the refund of the tax, on the ground that it was contrary to Community law, were lower than those applicable to refund of the same tax for any other reason under national law. But since 41. These statements apply also to another that does not occur and the interest which the aspect of the rules on entitlement to refunds, tax authorities must pay, in accordance with namely the payment of interest. Community the rules cited by the national court, applies law does not require that the rate and the without distinction to all actions for recovery other features of interest governed by legisla- of the tax, whatever the basis thereof, the tion should be the same for relations between answer to the second question from the private individuals as for relations with tax national court must uphold the compatibility authorities. What it does require is that the of those rules with Community law. rates and other factors should apply without distinction to actions based on domestic law and those based on Community law.

43. As regards the other aspects of this ques- tion which were not directly raised by the 42. There would thus be discrimination if the national court, but by the Commission and Italian provision on interest applicable to other plaintiff companies in their observa- actions for repayment of the tax unduly paid tions, 25 I refer to what I have already stated provided for rates which differed according in my Opinion in EDIS (points 51 to 65).

proceedings for recovery of taxes paid but not due are time-barred on the expiry of three years after the date of payment, even where that provision pre- vents, wholly or in part, the repayment of those taxes.

(2) Community law does not preclude the imposition by national law, for actions against the tax authorities for the recovery of taxes paid but not due, of interest rates which differ from those laid down for actions for the recovery of sums unduly paid between private individuals, provided that those rates apply without distinction to actions for recovery based on grounds of domestic law and those deriving from the application of Community provisions.

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