Opinion of Mr advocate-general

Mr President,

Members of the Court,

Since the entry into force of the Treaty of Rome and since the creation of this Court, the Lütticke Company, which is an important German import-export firm, has often shown before the Court its faith in Community law.

Those commenting on the Court's judgments and legal writers in general must be grateful to it for having been, probably, above all other private firms from Member States, the one which has brought before the Court the greatest number of applications giving rise to the greatest number of judgments on the implementation of the Treaty of Rome.

It is certain in fact that Lütticke has discovered, more rapidly than many others, all the possibilities which the provisions of this Treaty and Community law deriving from it might have for importers and exporters and has often, and almost systematically, sought to raise questions of Community law in the disputes which it has had with the German tax and customs authorities.

In the present action it attacks the Community authorities directly and asks the Court to order the Commission to pay it substantial compensation.

It is first necessary, I believe, to place this dispute in the category of those in relation to which it is in reality a development and, I hope, the final development.

As you know, the authors of the Treaty of Rome realized from the start that the provisions relating to the elimination of customs duties between Member States would be ineffective if those States, who retain their sovereignty in relation to internal taxation, could through that power compensate in some way for the effects of the abolition of customs duties or charges having equivalent effect.

Therefore Article 95 provided that no State should impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

Furthermore, no Member State may impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.

Finally, the third paragraph of this same Article 95 provides that Member States shall, not later than at the beginning of the second stage, repeal or amend any provisions existing when the Treaty enters into force and which conflict with the general rules which I have just recalled.

The application of these principles in the field of turnover taxes posed particularly delicate problems.

In fact, a single country, France, had introduced or was in the process of introducing a so-called integrated tax: the tax on added value imposed on a product only once and not at different stages of production or marketing.

All the other countries, on the other hand, applied a multi-stage tax system imposed on the product at different and successive stages of its production and marketing.

It was to overcome this difficulty that Article 97 of the Treaty provided that Member States which levied a turnover tax on a so-called cumulative multi-stage tax system might, in the case of internal taxation imposed by them on imported products or of repayments allowed by them on exported products, establish average rates for products or groups of products, provided that there was no infringement of the principles laid down in Articles 95 and 96.

The final paragraph of Article 97 provided in addition that, where the average rates established by a Member State did not conform to these principles, the Commission was to address appropriate directives or decisions to the State concerned.

All these provisions, according to the Court's interpretation, resulted in a complex system which may briefly be summarized, as in the opinion of Mr Advocate-General Gand of 4 May 1966 in Case 57/65 and in the five cases in which the Court gave judgment on 3 and 4 April 1968, in the following manner:

For the importation of milk and products effected after 1 January 1962, Lütticke considered that the equalization tax imposed on it by the German tax authorities was, contrary to the first paragraph of Article 95 of the Treaty, calculated according to an average rate of turnover taxes borne by similar domestic products, which was higher than the actual fiscal charge imposed on the said products.

It therefore decided to take a number of legal or similar steps.

It first requested the Commission to use against the Federal Republic of Germany the powers conferred on it by Article 169 of the Treaty, in other words to institute proceedings for failure to fulfil an obligation.

When the Commission refused, Lütticke brought before this Court a direct action and alternatively an action against the Commission for failure to accede to the request which it had put to it.

The Court dismissed this application as inadmissible in its judgment of 1 March 1966 in Case 48/65 ([1966] ECR 19).

But in the meantime Lütticke had contested before the German fiscal courts some of the notices of assessment which had been addressed to it.

Following these claims, the Finanzgericht of the Saarland made a preliminary reference to this Court on the point whether the provisions of Article 95 have direct effect, in other words whether they give individuals rights which the national courts are bound to protect.

In its judgment of 16 June 1966 in Case 57/65 ([1966] ECR 205) the Court recognized that Article 95 had direct effect.

On the basis of this judgment, the terms of which were confirmed by the Court's judgment of 3 April 1968 in Case 28/67, Lütticke obtained partial satisfaction before the German courts.

But it was not content with this.

Maintaining that if the Commission had since 1962 used against the Federal Republic of Germany all the powers conferred on it by the Treaty it would have paid in tax, in respect of a certain number of transactions which it had effected, less than that which it had in fact had to pay and for which it was unable to obtain relief, it brought before the Court an action for damages based on the provisions of the second paragraph of Article 215 of the Treaty.

By this action the applicant requests the Court:

The Commission requests the Court to dismiss the application as inadmissible or alternatively as unfounded.

I

Let us examine first of all the questions of admissibility.

The Commission puts forward four objections of inadmissibility. The first is of a purely formal nature; the other three refer, in my opinion, to the substance of the case rather than to the admissibility of the application in the strict sense.

II

This examination of the substance of the case normally implies, as in any case of non-contractual liability, the successive examination of three questions:

In this connexion, it is necessary, in addition, in the present case to determine the successive dates when the different instances of alleged damage occurred, since the Commission has raised against certain heads in the application the period of limitation prescribed by Article 43 of the Protocol on the Statute of the Court.

But I must first of all call the Court's attention to the fact that the documents in the file do not enable me to formulate my opinion and the Court to give a ruling, should it be necessary, on the third question set out above.

Although, in fact, everyone seems to agree that for a certain period the rate of the equalization tax imposed by the German Government on milk products was higher than the actual average rate of multi-stage taxes imposed on similar domestic products, there is considerable doubt as to the amount of such difference.

It is important in particular to notice, and this is one of the most salient peculiarities of this case, that the applicant company itself produced an expert's report giving figures far lower than those which it had previously advanced but different from those resulting from the calculations of the Commission or of the Government of the Federal Republic.

In these circumstances, only a further expert's report could help the Court with regard to these different points.

But I do not think it is necessary for the Court to order one. I believe in fact that, first, in this case, the fact complained of is not capable of giving rise to financial liability on the part of the Community and, secondly, and perhaps especially, the link of cause and effect between the fact complained of and the alleged damage has not been proved.

I shall endeavour to convince the Court of this.

Let us return, if you will allow me, to these two points.

This is the second reason for my opinion that the Court should :

1 Translated from the French.