OPINION OF ADVOCATE GENERAL RUIZ-JARABO COLOMER delivered on 14 May 1998 *

Transcription

1 MINISTERO DELLE FINANZE v IN. CO. GE.'90AND OTHERS OPINION OF ADVOCATE GENERAL RUIZ-JARABO COLOMER delivered on 14 May 1998 * 1. In each of this series of joined cases the Pretore di Roma (Magistrate, Rome) has referred the same question concerning the consequences of the incompatibility with Community law of a national measure where that measure imposes a tax regarded as incompatible with Community law and the taxpayers have brought proceedings to recover the amounts thus paid. 3. After the Court of Justice had delivered its judgment in Ponente Carni and Cispadana Costruzioni 2 (hereinafter 'Ponente Carni') in answer to a number of questions on the interpretation of Directive 69/335/EEC of the Council of 17 July 1969 concerning indirect taxes on the raising of capital, 3 the Italian legislature abolished the annual tax and reduced the amount of the tax payable when a firm was initially entered on the Register to LIT Facts, main proceedings and question referred to the Court 2. The orders of reference contain very little information on the facts in the main proceedings. It may be inferred that for certain unspecified years each of the companies which are parties to the main proceedings paid an annual tax on government concessions in respect of its entry on the Business Register. The tax had been introduced by Decree of the President of the Republic No 641 of 26 October 1972 ('Decree No 641/1972') and the amount had been the subject of various statutory amendments. 1 * Original language: Spanish. 1 For a fuller account of the legislative history of the tax, reference is made to point 7 et seq. of my Opinion in Case C-231/96 Edis v Ministero delle Finanze [1998] ECR , (hereinafter 'Edis'). 4. The Italian courts also declared that the annual tax was incompatible with Community law 5 and that, consequently, the sums paid by way of that tax were not due. 2 Joined Cases C-71/91 and C-178/91 [1993] ECR OJ, English Special Edition 1969 (II), p Decree-Law No 331 of 30 August 1993, converted into Law No 427 of 29 October See, in that regard, judgments of the Court of Cassation (First Civil Section) of 23 November 1994, No 9900, and 23 February 1996, Nos 4468/96 and 3458/96, the latter delivered by the Combined Chambers (Sezioni Unite). Similarly, in the second recital in judgment No 56 of 1995, of 24 February 1995, the Constitutional Court, after noting the legislative vicissitudes of the tax, held in respect of the year in which it was abolished (1993): 'Since the tax was unduly levied by the Italian State, contrary to Article 10 of Directive 69/335/EEC of 17 July 1969 as interpreted by the Court of Justice in its judgment of 20 April 1993 in Joined Cases C-71/91 and C-178/91, the amounts paid are recoverable on the basis of Community law, which is directly applicable in the Italian order'. I

2 OPINION OF MR RUIZ-JARABO JOINED CASES C-10/97 TO C-22/97 5. The companies referred to above obtained a decreto ingiuntivo, 6 whereby the Italian tax authorities were ordered to reimburse the amounts which the companies had paid at the relevant time. The Ministero delle Finanze lodged a number of objections to the decreto ingiuntivo and claimed, in particular, that the Pretore had no jurisdiction to deal with the matter and that the action for reimbursement was void. also have an effect on the legal relationship between the tax authorities and the person who paid the tax forming the basis of the action for recovery. 6. The Pretore, before reaching a decision on those objections, raised a matter of doubt the resolution of which requires a ruling by the Court of Justice: if the legal relationship between the tax authorities and the undertakings which paid the tax is of a fiscal nature the Pretore has no jurisdiction to deal with the matter, since it is not for him to determine 'cases concerning levies and taxes'. Similarly, the application of the rules which determine whether the actions are void or timebarred depends on whether the actions are classified in law as fiscal or as merely civil. 7. Consequently, and on the basis that the national law which established the tax is incompatible with Community Law, the Pretore has asked the Court of Justice whether that incompatibility requires that the law be disapplied in its entirety and whether it must 6 Article 633 of the Code of Civil Procedure provides that where certain conditions are met (where the debt is certain, liquidated and payable and supported by documentary evidence) the courts may issue a 'decreto ingiuntivo' whereby the debtor is put on notice to pay the amount claimed forthwith, albeit on a provisional basis. 8. The literal wording of the question referred to the Court is as follows: 'Does the incompatibility with Article 10 of Directive 69/335/EEC of the Council of 17 July 1969, as interpreted by the Court of Justice in its judgment of 20 April 1993 (in Joined Cases C-71/91 and C-178/91 Ponente Carni and Cispadana Costruzioni^ Amministrazione delle Finanze dello Stato [1993] ECR I-1915), of Artide 3(XVIII) and (XIX) of Decree-Law No 853 of 19 December 1984, converted into Law No 17 of 17 February 1985, means, on the basis of the criteria for integration of national law and Community law which that Court has laid down, that the said Article 3(XVIII) and (XIX) must be set aside in their entirety, and in particular does it mean that the national court must not take account of those internal provisions, even when classifying the legal relationship on the basis of which a national of a Member State calls on the finance administration to refund sums that were paid in contravention of the said Article 10 of Directive 69/335.' I-6310

3 MINISTERO DELLE FINANZE v IN. CO. GE.'90 AND OTHERS First part of the question 9. In reality the question poses two problems in turn, the first being wider in scope than the second. Although the national court asks the Court of Justice to rule on the relationship between the incompatibility of the internal provision with Community law and the disapplication of that provision, it subsequently concentrates on a specific aspect of that disapplication, namely its effect on the 'classification' of a specific legal relationship. 10. The answer to the first part of the question has already been provided by the Court of Justice on numerous occasions: a national provision which is incompatible with Community law cannot be applied and, consequently, the national courts must refrain from applying it to the dispute before them. 12. Ever since the judgment of 9 March in the leading case of Simmenthal, that statement has been formulated in terms that leave no room for doubt. It should be pointed out that the questions referred in that case to the Court by the Pretore di Susa, like the question in the present case, concerned the repayment of certain charges of a public-law nature demanded by the Italian authorities pursuant to national provisions that were contrary to Community law (specifically a fee charged for the health inspection of imported beef). 13. It is now 20 years since the Pretore di Susa sought to ascertain what consequences flowed from the direct applicability of a provision of Community law in the event of its incompatibility with a subsequent legislative provision of a Member State. The Court's answer, which subsequently became almost a standard formulation in its case-law on the matter, was that a national court which is called upon, within the limits of its jurisdiction, to apply provisions of Community law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provisions of national legislation, even if adopted subsequently, and that it is not necessary for the court to request or await the prior setting aside of such provisions by legislative or other constitutional procedures. 11. The uniform application of Community law would not be guaranteed if Member States claimed that their own internal provisions prevailed over the Community provisions, that is to say, if they were able to apply national law in preference to the Community provisions in the event of inconsistency between them. 14. That principle of case-law, whose acceptance in the legal life of the Member States 7 Case 106/77 [1978] ECR 629. I-6311

4 OPINION OF MR RUIZ-JARABO JOINED CASES C-10/97 TO C-22/97 has not been exempt from controversy, 8 has been repeatedly confirmed by the Court of Justice. 9 It is unquestionably applicable to the tax at issue in the present case, as the highest Italian courts have in fact declared. 10 Furthermore, the principle is not disputed by any of the parties to the main proceedings. 17. In fact, as I have just observed, the Court has confined itself to stating that such national provisions cannot be applied, as otherwise the very realisation of the European Community as a community subject to the rule of law would fail. However, it has rightly in my view refrained from determining the abstract, general concept, that is to say, the legal category into which the obligation to disapply falls. 15. The answer to the first part of the question must therefore confirm that a national court faced with a national provision which is incompatible with Community law must disapply that provision. Second part of the question: the consequences of disapplying national law in relation to the classification of specific legal relationships 18. The Court's case-law could, in theory, have had recourse to some of the legal categories well known in the general theory of law (such as, for example, 'non-existence', 'invalidity', 'nullity', 'ineffectiveness', 'loss of force', 'illegitimacy' or other similar categories) in order to identify the defect which affects national provisions where they are incompatible with the Community order. 16. While the Court has shown resolution in maintaining the principle of the primacy of Community provisions, it has also shown prudence in not reaching a decision on the underlying legal categories beyond the obligation to disapply the national provision which is inconsistent with the Community provision. 8 In the case of Italy, see A. Barav, 'Cour constitutionnelle italienne et droit communautaire: le fantôme de Simmenthal', Revue trimestrielle de droit européen, 1985, pp. 313 to For a recent example, see the judgment of 5 March 1998 in Case C-347/96 Sotred v Administración General del Estado [1998] ECR I-937, paragraph See point 4 and footnote 5 above. 19. However, the Court has carefully avoided employing such concepts in its decisions, no doubt because it is aware that the choice of any of those concepts whose meaning, moreover, varies from one legal system to another is more a matter for the individual legal systems. Within the limits of the solutions adopted by each of those systems, it will fall to the national courts, and specifically those on which, in each Member State, jurisdiction has been conferred to review the 'lawfulness' of legislation, to rule on the matter This does not alter the fact that in the interests of legal certainty the national legislature should repeal the national law that is contrary to Community law. I-6312

5 MINISTERO DELLE FINANZE v IN. CO. GE.'90 AND OTHERS 20. In Luck 12 the Court of Justice gave an express ruling in that regard. The question referred to the Court was whether, owing to the primacy of a Community provision in this case Article 95 of the EEC Treaty the provisions of national law incompatible with it must (following the entry into force of paragraph 3 of Article 95) be regarded as void or merely inapplicable. 21. The answer in Luck was that although Article 95 of the Treaty has the effect of excluding the application of any national measure incompatible with it, it does not restrict the powers of the national courts to apply, from among the various procedures available under national law, those which are appropriate for the purpose of protecting the individual rights conferred by Community law. Consequently, the Court went on, 'it is for the for the court making the reference to choose a solution from among those suggested in the question [referred for a preliminary ruling] and, indeed, any others'. 22. For the purpose of protecting the primacy of Community law over incompatible national provisions the crucial point is that those provisions should not be applied in the national legal order: this ensures that Community law is observed and also that it is uniformly applied in all the Member States. (i) The supposed 'non-existence' of a national provision which is incompatible with Community law 23. In its written observations 13 the Commission states that when the Court is confronted with a national provision which introduces a tax incompatible with Community law it must establish whether that provision 'is to be regarded as non-existent ex tunc' or 'inapplicable as regards the future because it has been declared incompatible with Community law'. Elsewhere in its observations it merely refers, in these cases, to the 'lack of legislative competence of the State' or the mere 'non-existence of the tax obligation' as matters which in such cases should determine the answer to be given to the national court. 24. I shall begin by examining, under this heading, the problems raised by the proposition that a national provision incompatible with Community law should be declared 'non-existent'. In the next part I shall deal with the supposed lack of legislative competence of the State in the present case, since the referring court refers to that question when discussing the classification of the legal-fiscal relationship. 25. To my mind the Court should not abandon the prudent approach to which I 12 Case 34/67 [1968] ECR In reality in paragraph 20 ofits observations in Case C-231/96 Edis, to which the Commission refers in the present case. I

6 OPINION OF MR RUIZ-JARABO JOINED CASES C-10/97 TO C-22/97 have referred earlier in favour of a hazardous course of defining or selecting its own dogmatic categories in relation to these matters, or resolving the rather academic debate as to which of the abovementioned categories is applicable. Such a course of action is neither necessary since by retaining the criterion of the inapplicability of the national provision the primacy of the Community provision is guaranteed nor perhaps appropriate, having regard to the different conceptions which can be defended in this sphere. 27. One line of interpretation of this passage, which is supported by a minority of commentators, maintains that it is authority for the 'non-existence' of a subsequent national provision which is incompatible with Community law. In its observations the Commission seems to agree with this point of view, since, after citing paragraph 17 of the Simmenthal judgment, it infers from that paragraph that the incompatibility with Community law of the national provision 'means that the Member State has no power whatever to impose taxation' and, in paragraph 20 of its observations, asks whether the Court should declare the national provision non-existent. 26. It is certain, however, that a passage in paragraph 17 of the Simmenthal judgment could be construed as in fact it was in a sense opposite to the one I have just proposed. I am referring to the passage where the Court states: 28. While I acknowledge the force of that argument, I do not subscribe to it. 'Furthermore, in accordance with the principle of the precedence of Community law, the relationship between provisions of the Treaty and directly applicable measures of the institutions on the one hand and the national law of the Member States on the other is such that those provisions and measures not only by their entry into force render automatically inapplicable any conflicting provision of current national law but in so far as they are an integral part of, and take precedence in, the legal order applicable in the territory of each of the Member States also preclude the valid adoption of new national legislative measures to the extent to which they would be incompatible with Community provisions.' The Commission's stance on the choice between non-existence and derogation as the only categories applicable is to my mind, on the one hand, oversimplistic and, on the other, confused in that it fails to distinguish between the temporal and the substantive problems relating to each category. 30. It is possible and to a certain extent frequent in some legal systems to declare a national provision invalid and to endow that declaration with effects ex tunc without its amounting in law to a ruling that the provision is 'non-existent'. 14 Emphasis added. 31. Similarly, there is no good reason why, when a provision is set aside, it should not be I

7 MINISTERO DELLE FINANZE v IN. CO. GE.'90 AND OTHERS set aside with retroactive effect. That would certainly imply an exception to the general rule that a declaration setting a provision aside takes effect for the future, but the legislature is also able to confer retroactive effect on its decisions which repeal existing measures. How the legal system regulates situations which came into existence by virtue of the provision set aside while it was de facto in force is another matter. is not even required by paragraph 17 of the Simmenthal judgment, which merely refers to the Valid adoption' of the national legislative measures which are incompatible with Community provisions. It is therefore more a question of invalidity than of non-existence. 32. Therefore the temporal problems should not be confused with the particular nature and effects of the various competing legal categories. The problems are distinct and require a differentiated analysis. 35. I consider, on the other hand, that when it comes to analysing the effects which, under a national law which has been actually applied, are produced when it is subsequendy declared incompatible with Community law, it makes no sense, in strictly legal terms, to speak of the 'non-existence' of the law. 33. That apart, the Commission's theory concerning the choice between non-existence and setting aside (in its view the only choice available to the Court) is to my mind oversimplistic. The Court has not considered it necessary to make a rinding in that regard but has adopted a solution (non-application) which avoids the problems inherent in both categories. 36. The declaration of 'non-existence', as the legal system's response to or penalty for the exceptional gravity of the defects which affect a measure, is employed in some Member States to classify certain administrative measures. On parallel lines, the Court has accepted that a Community administrative measure which exhibits particularly serious and manifest defects could also be classified as 'nonexistent' In so far as the Commission refers to the supposed 'non-existence' of a national provision contrary to Community law, I shall begin by stating that such a fiction and it is beyond doubt a legal fiction, since the provision has existed and, in cases such as this, has in fact produced its effects over the years 15 See Case 15/85 Consorzio Cooperative d'abruzzo v Commission [1987] ECR 1005, paragraph 10. The distinction between 'non-existence' and mere 'invalidity' of a Community measure was analysed by the Court of Justice when it determined the Commission's appeal against the judgment of the Court of First Instance injoined Cases T-79/89, T-84/89, T-85/89, T-86/89, T-89/89, T-91/89, T-92/89, T-94/89, T-96/89, T-98/89, T-102/89 and T-104/89 BASF and Others v Commission [1992] ECR II-315. In its judgment in Case C-137/92 P Commission v BASF and Others [1994] ECR I-2555 the Court of Justice set aside the judgment delivered at first instance on the ground that the declaration that Commission Decision 89/190/EEC was 'non-existent' was unlawful. Instead the Court of Justice merely annulled the decision. I-6315

8 OPINION OF MR RUIZ-JARABO JOINED CASES C-10/97 TO C-22/ On the other hand, in those same national legal systems that is, those in which the category of 'non-existence' is available as a very exceptional sanction in the case of manifest defects of particular importance it is not the custom to classify legislative provisions enacted by Parliament, published and in force as 'non-existent', even where they have defects which render them invalid. Community legislative provision because it contains elements which render it invalid. As I said earlier, declarations of that type are made in respect of administrative measures but not legislative provisions It is in this context that we encounter the phenomenon, well known in many legal orders, of the declaration of 'illegality' (I use the word 'illegality' in its wider sense, which encompasses all the various hypotheses, which differ according to the legal system concerned, in which a provision lacks binding force, usually because it conflicts with rules of law of a higher order). Where in such a case, following a declaration of unconstitutionality or similar procedure, a law is retrospectively declared to be defective to the point of being invalid, that does not mean that it is held to have been 'non-existent' Moreover, it is clear upon analysing the judgments in which the Court has specifically reviewed national legislative measures having a fiscal content for their compatibility with Community law that it is inappropriate to speak of 'non-existence' in this case. Such a legal category would preclude judicial decisions which accept that certain effects of the national law subsist in spite of the fact that the law was contrary to the Community order. 41. I shall give two significant examples. The first is readily seen in the consistent case-law of the Court on repayment by the Member States of taxes collected but not owed. It has been accepted in that line of decisions that actions for recovery (where the taxes in question were demanded pursuant to a national 39. Nor, following the same parallelism as that referred to above, does one speak in Community law of the 'non-existence' of a 16 It might in theory be accepted that this classification should be attributed to legislative measures whose promulgation or adoption was affected by particularly serious irregularities, as a result of which there would only be an 'semblance' of a law, or a de facto law: such provisions would, in legal terms, be non-existent. This would apply, for example, where a law was adopted by only one Chamber in a State with a bicameral legislature, or published without the approval of the authority recognised as competent by the Constitution. 17 In Joined Cases 15/73 to 33/73, 52/73, 53/73, 57/73 to 109/73, 116/73, 117/73,123/73, 132/73 and 135/73 to 137/73 Kortner and Others vcouncil, Commission and Parliament [1974] ECR 177, the Court expressly stated that a Community provision (in this case Article 4(3) of Annex VII to the Staff Regulations of Officials of the European Communities) could not be termed 'non-existent' merely because it contained elements of discrimination which had led to its being indirectly annulled in a previous judgment. The Opinion of Advocate General Trabucchi in that case reflects the same point of view as I support: '... In a system such as our Community law system, there appears to be no reason to depart from the criterion followed in the various national legal systems, according to which an act laying down regulations capable of implementation and which complies with the essential requirements as to procedure, form and competence as regards its introduction and publication, is an act which may be rendered invalid owing to some incompatibility of its contents with superior rules or principles, but which can never be repudiated as null and void.' I-6316

9 MINISTERO DELLE FINANZE v IN. CO. GE.'90 AND OTHERS provision that was contrary to Community law) might be subject to the five-year limitation period established by the national legislative measure, even where that measure precludes total or partial repayment of the taxes. 18 which are not applicable to legal situations which are still amenable to judicial review. 42. This line of decisions implicitly makes the point that, despite being contrary to Community law, the national provision has existed and has produced effects in time which, taking into consideration situations which are legally 'exhausted', are now not amenable to judicial review. The recognition of such effects would not be possible if it were necessary to regard the national law as wholly 'non-existent'. 44. That means accepting, albeit exceptionally, not only the existence but also even the applicability of the national law which is contrary to Community law. The use of this technique of limiting the temporal effects of judgments would be inconceivable if the national tax law incompatible with Community law were to be regarded as non-existent. (ii) The classification of the legal relationships in the main proceedings 43. The second example refers to certain rulings of the Court of Justice on the temporal aspects of a declaration that national tax measures are incompatible with Community law. As is well known, in certain cases the Court, for reasons of legal certainty, has restricted the temporal effects of its own judgments, As the Italian, French and United Kingdom Governments maintain, the classification of the legal relationships existing between the parties to the main proceedings is a matter for the national court, not for the Court of Justice. It is for the national court to decide whether they are fiscal relationships or merely civil relationships and what the consequences of that fact are for the dispute. 18 This problem, and also the recent judgment in Joined Cases C-114/95 and C-115/95 Texaco v Middle/art Havn and Others [1997] ECR I-4263; Case C-90/94 Haahr Petroleum [1997] ECR I-4085; and Case C-188/95 Fantask and Others v Industriministeriet [1997] ECR I-6783, are considered in my Opinions in the Edis, SPAC and Ansaldo cases. 19 In my Opinion in the Edis case I consider the application of this position in relation to the normal temporal effectiveness of the rulings given on questions of interpretation. 46. The national court, however, expresses its doubts as to the impact that the declaration that a provision is incompatible with Community law may have on the legal classification of such relationships. In that perspective, I-6317

10 OPINION OF MR RUIZ-JARABO JOINED CASES C-10/97 TO C-22/97 the question is not inadmissible, since the Court of Justice can assist the national court in specifying the consequences of the fact that the national provision is inapplicable. in that regard referred to various decisions of the Court of Justice At the risk of stating the obvious, I shall state at the outset that where the tax authorities receive from a taxable person acting as such the amount of a tax remitted by way of payment of a previously quantified tax debt, it is difficult to deny that the legal relationship established has also been a fiscal relationship. 48. It is a separate matter where the legal premiss which served as the basis for the payment of the tax (that is, the provision governing it) is subsequently declared to suffer from a defect that renders it invalid. The defect in question, like the invalidity of the obligation itself, will no doubt produce certain legal effects (including, generally, reimbursement of the sum paid), but will not alter the fact that the relationship in the context of which payment was made was from its inception fiscal in nature. 50. To my mind that argument calls for some qualification. It is true that the fact that a national tax provision is incompatible with Community law means that taxpayers are not obliged to pay the tax and that if they do they will be entitled to reimbursement. In the latter case, however, the fact that the tax obligation was not valid does not necessarily imply any particular classification of the previous legal relationship: it will be for the various national legal systems to determine that point. It may be the case that for reasons of legal certainty certain fiscal relationships, including those based on provisions which have been declared void, are not susceptible of being reclassified and have consolidated the corresponding legal situations, which are regarded as intangible in law. 51. This type of situation exists not only in national law but also in Community law. At the hearing the Commission referred, in support of its argument that a fiscal relationship deriving from a provision which has been declared void is non-existent, to an extract from the judgment of the Court of Justice in 49. At the hearing the Commission, which had already claimed in its written observations that the fiscal obligation deriving from a provision of this type was non-existent, maintained that argument at the hearing and 20 The Commission referred, in particular, to paragraph 28 of the judgment in Case C-228/90 Simba and Others v Ministero delle Finanze [1992] ECR I-3713, which reads as follows: 'where national courts consider a national law introducing a duty such as the national tax on consumption to be incompatible with provisions of Community law contained in agreements, conferring rights on individuals, the individuals concerned are not required to pay such a duty'. I-6318

11 MINISTERO DELLE FINANZE v IN. CO. GE.'90 AND OTHERS FMC and Others, 21 according to which the invalidity of a Community rule requiring payment of a specific financial contribution may be invoked by those concerned from its entry into force and not only from the date on which legal proceedings were brought in respect of that provision. 22 Immediately afterwards, however, the same judgment acknowledges that Community law does not preclude 'the application of a period of limitation or prescription laid down by a rule of national law which restricts the period... in respect of which reimbursement of undue payments may be obtained...'. 23 The Court thus acknowledges that the legal situations resulting from a Community provision which has been declared void may have become stable and be unassailable, notwithstanding the invalidity of the obligation on which they are based. in the hierarchy of norms, by the appropriate judicial organs Such a declaration that a provision is invalid may or may not, depending on the case, imply the reclassification of the legal situations which came into being by virtue of that provision; if it does so, the reclassification may affect only the situations which are still pending or even (more rarely) those which have already exhausted all their effects. 52. In the majority of Member States a declaration of invalidity of provisions which impose an obligation to pay a tax requires a judicial decision, either annexed to a declaration of unconstitutionality by the Constitutional Court or similar organ 24 in the case of a statute or by similar procedures, depending upon the place which the provision occupies 21 Case C-212/94 [1996] ECR I The extract was from paragraph 62, which states that the operators concerned could invoke the invalidity of an invalid Community regulation 'not only subsequent to, but also prior to, the bringing of an action or the making of an equivalent complaint, in principle as from the date on which the provisions declared invalid by the Court entered into force'. 23 Paragraph A declaration that a law having a fiscal content is unconstitutional does not necessarily entail its nullity, with the consequent effect ex tunc. In mat regard, see the article by E. Garcia de Enterría: Un paso importante para el desarrrollo de nuestra justicia constitucional: la doctrina prospectiva en la declaración de ineficacia de las leyes inconstitucionales', Revista Española de Derecho Administrativo, 1989, No 61, p. 5 et seq. 54. It is for the national legal systems to regulate all those matters and to specify, in the case of fiscal provisions, the legal effects of a declaration that they are inconsistent with a rule of law of a higher order. There is nothing to prevent the legislature, or the national court, from establishing that these effects include reclassifying the legal relationships which came into being by virtue of the provision, so that what was previously a fiscal relationship may subsequently be classified as a merely civil relationship. 25 In some Member States, as in Spain, the ordinary courts' power of review extends to decree-laws, for the purpose of determining whether the executive has exceeded the powers conferred on it by the legislature. In Derecho Comunitario: sistema constitucional y administratívu de L Comunidad Europea (Madrid, 1994, p. 476) R. Alonso García maintains that if the powers delegated by the national legislature allow the executive to implement rules contained in Community legislation the ordinary courts will have jurisdiction to review the relevant measures. I-6319

12 OPINION OF MR RUIZ-JARABO JOINED CASES C-10/97 TO C-22/ The referring court is aware that the Corte Suprema di Cassazione has already resolved the problem in Italy and held that the original relationship was of a fiscal nature and that, accordingly, the applicable rules are those which specifically regulate the reimbursement of taxes paid but not due. None the less, the national court further states that it does not find this judicial solution 'persuasive' and insists that the non-application of the national fiscal provision that is contrary to Community law presumes 'the total absence of any power of taxation vested in the State, having regard to (or, rather, because of an infringement of) the pre-existing Community legislation'. 58. It may happen that in exercising the legislative power to establish and determine the form of such taxes (which, in the last analysis, is what is known as the power of taxation) a Member State infringes the directive, for example by imposing an annual tax for registration on the public register in an amount which bears no relation to the cost of the service and therefore in reality is not 'paid by way of fees or dues'. That was the case of the Italian tax in issue. 56. I have pointed out above how the Commission also expressly and repeatedly employs the expression 'the total absence of any power of taxation vested in the State' to refer to the same phenomenon. 59. The fact that a Member State, when legislating on a tax which has been harmonised at Community level, infringes the harmonised rules does not mean that it thereby loses its power to tax. It simply means that the national provision that is contrary to the Community rule must yield to the primacy of the Community rule and therefore cannot be applied. 57. In my view that approach is not appropriate. As a matter of principle Member States retain the power to establish national taxes. In so far as indirect taxes on the raising of capital are concerned, they are required to comply with the terms of Directive 69/335, which deals with the harmonisation of national legislation concerning such taxes. That directive allows them, inter alia, to charge 'duties paid by way of fees or dues', that is those which cover the cost of a specific service, as is the case of the registration of undertakings and company documents in a public register. 60. Therefore the 'total absence of any power to legislate' must not be confused with the irregular or improper exercise of that power. The former concept implies that an institution or, in this case, the State is denied competence to regulate specific matters because the power to do so is reserved for other authorities. 26 The term 'irregular exercise', on the other hand, means that the body in whom competence to legislate is vested misuses that competence and adopts a legisla- 26 Thus, for example, the Member States are not competent to introduce a customs tariff in their relations with nonmember countries, since they have conferred power to adopt such a common measure on the Community. I

13 MINISTERO DELLE FINANZE v IN. CO. GE.'90 AND OTHERS tive provision which, owing to the primacy of the Community provision, must not be applied by the national courts. the reclassification of pre-existing legal relationships. 61. Where a Member State, in using one of its own powers, such as the power to impose indirect taxes on company activities, infringes the harmonised Community rules in some way, it will not be able to claim that its own provisions should be applied and will even have to repeal them but that does not mean that it does not retain its own power or competence to introduce and regulate taxes. 62. For that reason I reject the approach proposed both in the order for reference and in the Commission's observations; and having done so, and having reiterated that the national court has jurisdiction to classify the legal relationships which exist between the parties to a dispute before it, I must conclude by stating that the application of the principle of the primacy of the Community provision has no direct impact on such a question. 64. None the less, the principle of equivalence between actions brought with a view to securing reimbursement of amounts paid but not due, whether they be based on grounds of Community law or on grounds of national law, would preclude the application to this problem of solutions different from those which domestic law provides in the event of the infringement of national rules. In other words, if the reclassification of the previous legal relationship (which would no longer be a fiscal relationship but merely a civil relationship governed by the provisions of a civil law) were a necessary consequence of the incompatibility of a national tax provision with a rule of national law of a higher order for example, a rule of constitutional law the same consequence should apply where the provision in question is incompatible with Community law Consequently, in those legal systems which so allow, the national court can reclassify such situations if the provision under which they came into being is subsequently declared contrary to a rule of law of a higher order. From the point of view of Community law, the principle that a national provision that is incompatible with Community law is not applicable neither requires nor precludes 65. It does not appear, however, in the light of the information before the Court, that this is the position in Italy. As I pointed out in my Opinion in Edis (points 58 to 64), the case-law of the Italian Corte di Cassazione 28 on the consequences of declarations of unconstitutionality of laws with a fiscal content, as 27 The Commission referred to this question in its observations in the Edis case, and suggested that the question referred by the national court be reformulated. I refer to point 51 et seq. of my Opinion in that case. 28 Judgments of 9 June 1989, No 2876, and 21 June 1996, No I

14 OPINION OF MR RUIZ-JARABO JOINED CASES C-10/97 TO C-22/97 regards the taxes already paid pursuant to that law, is as follows: Judgments of the Corte di Cassazione which declare to be unlawful provisions ranking as laws eliminate the latter from the legal order ex tunc, in the sense that they can no longer be applied to outstanding legal relationships; legal relationships which have run their course, that is to say those whose effects have been consolidated to such a point that they cannot be changed, are not affected by such pronouncements. Specifically, such judgments do not affect those tax relationships arising by operation of law which, for various reasons, must be regarded as having come to an end. Those reasons may include the existence of a previous judgment, or the fact that the tax assessment has become final (through not being challenged or through dismissal of a challenge), or the effluxion of prescription periods or time-limits laid down by the rules governing the tax. There is no basis for the view that, because of the retroactive effect of declarations of unconstitutionality, the tax obligation is non-existent in radice and, therefore, the general rule on charges improperly levied (Article 2033 of the Civil Code) would immediately take effect, so that the action could be brought without reference to the procedures for challenging tax assessments and regardless of the time-limits laid down by the tax provisions. In conclusion, there is no basis for the view that in such cases (even where it is contended that there was no valid tax relationship, either original or supervening) an action for recovery of the sums unduly paid provided for by the Civil Code would be available, rather than one covered by the specific rules for tax litigation, both substantive and procedural. Therefore, payments of tax debts based on fiscal provisions held to be unconstitutional cannot be affected where the taxpayers allowed the legal relationship in question to consolidate itself. 66. I do not find, therefore, that in this matter the application of Italian law, as carried out by the supreme courts of that country, implies a difference in treatment between the consequences of a declaration that a tax law is incompatible with Community law and the consequences of a declaration that that law is unconstitutional, on purely domestic legal grounds. I

15 MINISTERO DELLE FINANZE v IN. CO. GE.'90 AND OTHERS Conclusion 67. I therefore propose that the Court should answer the question referred to it by the Pretore di Roma as follows: A national court which is required, within the scope of its jurisdiction, to apply Community law is under an obligation to ensure that full effect is given to it by disapplying, if necessary, provisions of national law which are incompatible with it. Where those provisions have introduced a tax that is incompatible with the provisions of a directive and must therefore be disapplied, Community law neither precludes nor requires a particular classification or reclassification of pre-existing legal situations which came into being by virtue of the national provision. I