JUDGMENT OF 4. 4. 1968 — CASE 25/67 EIERKONTOR v HAUPTZOLLAMT SAARBRÜCKEN

In Case 25/67 Reference to the Court under Article 177 of the Treaty establishing the European Economic Community by the Finanzgericht (Finance Court) (the competent court in taxation matters) of the Saarland for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, A. M. Donner and W. Strauß (Rapporteur), Presidents of Chambers, A. Trabucchi, R. Monaco, J. Mertens de Wilmars and P. Pescatore, Judges, Advocate-General: J. Gand Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts

1. Summary

2. Contents of the order referring the matter: arguments of the Finanzgericht

On the second question

On the second question

On the third and fifth questions

On the sixth question

On the seventh question

On the eighth and tenth questions

On the eleventh question

On the twelfth question

II — Procedure

III — Summary of the observations submitted by the parties concerned

1. The first, second and sixth questions

The sixth question

2. The third, fourth and fifth questions

3. The seventh question

4. The eighth, ninth and tenth questions

5. The eleventh and twelfth questions

With regard to the twelfth question, the principles to be deduced from the case-law of the Court allow the inference that an individual may rely upon an infringement of Article 11 or Regulation No 22 before national courts.

I — The effects of Article 97 (third to fifth questions)

II — The concept of average rates and the taxation referred to in Article 95 (first, second and sixth to tenth questions)

III — The interpretation of Article 11 of Regulation No 22 of the Council (eleventh and twelfth questions)

IV — Costs

I —. Facts

1. Summary

2. Contents of the order referring the matter: arguments of the Finanzgericht

A —. On 19 June 1967, the Finanzgericht of the Saarland decided to ask the Court of Justice to give a preliminary ruling on the following questions:

B —. With regard to the grounds of the order referring the to the various questions which it contains, the statement of Finanzgericht include the following in particular:

II —. Procedure

III —. Summary of the observations submitted by the parties concerned

1. The first, second and sixth questions

(a). Only the rates which were fixed on the basis of a comparison made in concreto with the amount levied by way of turnover tax on domestic products are authentic average rates. It follows from this that this expression does not cover, for example, the rates which a Member State has introduced before the entry into force of the Treaty by putting them exactly on the level of rates levied on domestic products at the stage corresponding to that of importation. In cases of this type the application of Article 97 is not taken into account. The fact remains that in practice rates thus fixed represent in general only a minimum tax and they consequently conform to Article 95. The correctness of this argument appears from the following considerations.

(b). A rate calculated by estimation cannot be an average rate unless the estimate is confined to a minimal average tax which can be justified for valid reasons.

2. The third, fourth and fifth questions

(a). This provision cannot have such an effect, because it does not lay down a clear and unconditional obligation, as is provided for by the judgment in Case 57/65:

(b). The correctness of these considerations is proved by the fact that Article 97 provides special arrangements derogating from Article 169 for the procedure which the Commission must employ if the Member States infringe the Treaty. The reason is that the assessments and estimates necessary for the application of Article 97 require Community supervision; the authors of the Treaty wished to avoid the use of the power of appraisal being directly called in question before the Court of Justice.

(c). It is impossible to raise against this view the objection that it gives different results in each Member State. As the legal provisions of the various Member States are dissimilar, it is inevitable that certain provisions of the Treaty will only be applied in certain States. Since all the Member States are to introduce the value added tax prior to 1 January 1970, the problems raised by Article 97 are merely transitional.

(d). Community law contains a series of provisions which are addressed exclusively to the States, which are obliged to transform them into provisions addressed directly to individuals. These principally concern matter which encroach upon the national legal systems. These legal systems constitute separate orders within which all legislative provisions are to a certain extent interdependent; this is why the Member States were left free to insert the Community rules harmoniously into their own legal systems. The equalization tax shows clearly the importance of these considerations. If the concept of direct applicability were admitted, courts would have to make far-raching investigations to decide wehther the rate of a tax were too high. This would result in too many disadvantages for all persons concerned.

(e). Article 97 is an independent provision addressed to the Member States, which levy a turnover tax calculated on an cumulative multi-stage tax system and thereby governs cases in which it is impossible to make an actual comparison of the taxes. Although it refers to Article 95, this is merely to avoid repetition. The fact that one provision refers to another does not ipso facto imply that it is subordinate to it. Moreover, this reference is only to the principles set out in Article 95.

3. The seventh question

4. The eighth, ninth and tenth questions

5. The eleventh and twelfth questions

I —. The effects of Article 97 (third to fifth questions)

II —. The concept of average rates and the taxation referred to in Article 95 (first, second and sixth to tenth questions)

(1). In its first question the court making the reference asks the Court of Justice to state in a general manner what must be understood by average rate within the meaning of Article 97 of the EEG Treaty.

(2). As to the first and second questions, by virtue of the first paragraph of Article 97 it is for the Member States to establish average rates, with the Commission alone having power to intervene pursuant to the provisions of the second paragraph of Article 97, and in certain circumstances of Article 169, against the failure to conform to the principles set out in Article 95, without prejudice to the rights conferred by Article 170 on the other Member States.

(3). It follows from the information provided by the court making the reference and the general structure of its questions that the eighth, ninth and tenth questions require an interpretation of Article 95 only in the light of that of Article 97.

(4). The sixth question inquires whether or not in certain cases set out by the Finanzgericht there is a legal average rate.

III —. The interpretation of Article 11 of Regulation No 22 of the Council (eleventh and twelfth questions)

IV —. Costs

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the Government of the Federal Republic of Germany, the Commission of the European Communities and the plaintiff in the main action; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 9, 12, 13, 95, 97, 169, 170 and 177; Having regard to Regulation No 22 of the Council of the EEC on the progressive establishment of a common organization of the market in poultry meat (Official Journal of 20 April 1962, p. 959 et seq.), especially Article 11; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; Having regard to the judgment of the Court of 3 April 1968 in Case 28/67, THE COURT in answer to the questions referred to it by the Finanzgericht of the Saarland, by order of that court of 19 June 1967, hereby rules:

1 The first paragraph of Article 97, which applies where Member States operating a turnover tax according to the cumulative multi-stage system have actually exercised the right therein granted to them, does not create individual rights which national courts must protect;

2 In States which have exercised the power made available to them by Article 97 rates are considered as average rates if they are established as such by the States in question, without prejudice to the operation of the second paragraph of that article;

3 A tax which is levied within the framework of turnover tax legislation and is designed to place all categories of products both domestic and imported in a comparable tax situation constitutes internal taxation within the meaning of Article 95;

1 In this case the Court on 16 May 1968 made an order similar to that in Case 13/67 (see p. 187).