JUDGMENT OF 16.12.1960 — JOINED CASES 41, AND 50/59 HAMBORNER BERGBAU v HIGH AUTHORITY

In Joined Cases

THE COURT composed of: A. M. Donner, President, Ch. L. Hammes and N. Catalano, Presidents of Chambers, O. Riese and L. Delvaux, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and law

I — Statement of the facts

The facts which form the basis of the present dispute may be summarized as follows:

By a letter of 17 July 1959 the Hamborner Bergbau Aktiengesellschaft and the Friedrich Thyssen Bergbau Aktiengesellschaft claimed on the basis of their financial situation the refund of the levy relating to the current eighth financial year (from 1 July 1959 to 30 June 1960).

On 24 July 1959 the High Authority replied as follows:

‘We acknowledge receipt of your letter of 17 July 1959 whereby you and Friedrich Thyssen Bergbau AG claim the reimbursement of the levy for the financial year 1959-1960. Unfortunately we cannot agree to this claim since no provision for the reimbursement of levies to individual undertakings has been made either in the Treaty establishing the European Coal and Steel Community or in the general decisions of the High Authority concerning the payment of levies. Consequently, you should advise the Ruhrkohlentreuhand GmbH that, as in the past, it must settle the levies payable by you and by Friedrich Thyssen Bergbau AG.’

On 6 August 1959 the applicant undertakings sent the High Authority the following letter:

‘We acknowledge receipt of the letter from your Levy Office dated 24 July 1959. In this matter, which is crucial for our financial situation, we naturally wish to have a binding reply from the High Authority; we therefore request you to notify your decision to us in accordance with the second paragraph of Article 15 of the Treaty.’

Since there was no reply to this last letter the applicants lodged, in Case 41/59, the application dated 27 August 1959 which was received at the Court Registry on 1 September 1959 and, in Case 50/59, the application dated 9 November 1959 which was received at the Court Registry on 11 November 1959.

II — Conclusions of the parties

In Case 41/59 the applicants claim that the Court should:

‘1. Annul the decision notified to the applicants on 27 July 1959 by the defendant's letter of 24 July 1959; 2. Declare that the contested decision involves a wrongful act or omission rendering the Community liable; 3. Order the defendant to bear the costs.’

In Case 50/59 the applicant claims that the Court should:

‘1. Annul the High Authority's implied decision of refusal to be inferred from its silence concerning the applicant's letter of 6 August 1959; 2. Declare that the contested decision involves a wrongful act or omission rendering the Community liable; 3. Order the defendant to bear the costs.’

In both cases the defendant contends in identical terms that the Court should:

‘Dismiss the application as inadmissible; alternatively, dismiss the application as unfounded; in any event reject the claim for the declaration referred to in Article 34 of the Treaty and order the applicants to bear the costs of the proceedings.’

III — Submissions and arguments of the parties

The submissions and arguments of the parties may be summarized as follows:

Application 41/59

1. Admissibility of the application

Whilst the defendant does not dispute that the application was lodged in good time, it asks whether the letter of 24 July may be considered as a decision against which an application may be made. According to the defendant that letter merely refuses the re-fund of the levy and the final part of the letter only constitutes a logical finding without any legal effect.

This finding does not give rise to a duty. On the contrary, in calling upon the applicants to continue to pay the amount owing as levy as in the past, the High Authority merely reminds them of an existing duty. The obligation to pay the levy in fact follows from Decisions Nos 2/52 an 3/52 of the High Authority of which the version presently in force was published in the Journal Officiel No 10 of 18 February 1959 at page 213et seq. In the past the applicants fulfilled this obligation without its being necessary to send them a demand note.

The applicants maintain that this letter constitutes a demand note for the levy, that is, an individual decision. They maintain, on the basis of the case-law of the Court, that the letter of 24 July 1959 must be considered as a decision against which an application may be lodged. They consider that in the present case the request of 17 July 1959 took the form of a request for exemption; the refusal of this request implies an order to continue payment.

2. Objection of illegality

In the two cases the applicants contest princially (and indeed in Case 41/59, exclusively) General Decision No 33/59 (published in the JO No 39 of 22.6.1959, p. 726) on the basis of the objection of illegality.

The defendant maintains that the objection of illegality is inadmissible in the present case.

The defendant states that the applicants' arguments relating to the financial policy of the High Authority, in particular with regard to the establishment of certain funds, are not really directed against Decision No 33/59. When the applicants contest General Decision No 33/59 by way of their application against the letter of 24 July 1959, they in no way deal with the content or details of this decision and contest it purely to call in question the financial policy of the High Authority. The funds complained of existed long before the date when the High Authority adopted Decision No 33/59. The measures establishing those funds only gave rise to Decision No 33/59 in a very broad sense and very indirectly: at all events they do not constitute legal factors in this decision and consequently cannot be given material form in an individual decision.

The objection of illegality must also be dismissed because it is out of time. The establishment of the guarantee fund constitutes a fact known to all, at least after the publication of the ‘principles governing the action of the High Authority in financing investments’ in the Journal Officiel No 17 of 31 July 1954. The decision to restrict the amount of the guarantee fund to US $100000000 was published at page 10 of the Financial Report for the years 1953 to 1955, dated 15 March 1956. The establishment and the use of the special reserve are mentioned at pages 11 and and 15 of the Financial Report for the year 1956, dated 15 March 1957. The funds for the servicing of loans appear for the first time at pages 10 and 11 of the financial annex to the Fifth General Report dated 13 April 1957.

Thus, although the applicants were fully acquainted with all the facts they continued to pay the levies without objecting to the establishment of those funds. Even if it were possible to invoke the objection of illegality regardless of any time limits, an undertaking is nevertheless required to do so at least as soon as payment was requested from it on the basis of the general decision.

Furthermore the applicants, as they admit, have derived specific benefits from the policy of establishing the funds, in particular from the establishment and use of the special reserve. The defendant lists the various credits granted to the applicants from the funds of the special reserve for the building of workers' housing. It also provides a list of financial aids which the applicant undertakings obtained from the High Authority. The establishment of the guarantee fund made it possible to grant those credits on favourable terms. For all of these reasons the defendant considers that the applicants are out of time.

The applicants declare that they understand neither the distincton which the High Authority draws between legal and other factors in a decision nor that which it draws between factors on which a decision is directly based and those on which it is merely indirectly based. They state that the letter of 24 July 1959 is indisputably connected with General Decision No 33/59 since the legality of that decision depends upon whether the imposition of a levy for the financial year 1959 to 1960 is necessary for the High Authority to carry out its task and that such imposition is unnecessary since the High Authority has sufficient finance for the current year. With regard to the objection that the application is out of time the applicants maintain that such time-limits are foreign to the legal system of the European Coal and Steel Community. Nor can these time-limits be inferred from a general principle of law common to all the Member States of the European Coal and Steel Community since they are characteristic only of the German legal system.

The applicants also state that the objection of illegality can be raised at any time. It is lawful to invoke the objection without regard for time-limits. Even if there were such time-limits they would not come into play in the present case which relates to the question whether the levy was necessary to cover the budgetary costs for the year 1959 to 1960. For these reasons it is impossible to uphold the objection that the application is out of time.

3. The substance of the case

A. The submissions of infringement of the Treaty and of lack of competence

The applicants maintain that Decision No 33/59 infringes the Treaty, in particular Article 49 thereof which empowers the High Authority ‘to procure the funds it requires to carry out its tasks’. They maintain that this provision prohibits the High Authority from procuring by the levy more funds than are necessary for carrying out its tasks. The High Authority has failed to observe this prohibition through its imposition of lthe same levy for the financial year 1959 to 1960 as in the past, although it already possesses sufficient funds to carry out during that period the tasks required of it by the Treaty. In its estimate it made provision for this for expenses amounting to US $11984920. The High Authority already has this sum in the ‘guarantee fund’, ‘special reserve’ and ‘funds for the costs of servicing loans’. Those funds were not established on the basis of the Treaty, at least not with regard to the present sum. Consequently they are available to meet the estimated expenses. In its estimate for the year 1959 to 1960 the imposition of a levy for the eighth financial year is not ‘required’ within the meaning of Article 49 of the Treaty.

The applicants invoke the essential requirement that taxation shall be minimized, that is to say that the levy must be strictly in accordance with requirements because:

The fact that the undertakings of the ECSC bear the costs of the first experiment in European integration infers that taxation should be reduced to the minimum required.

The essential principle of the Treaty, that of limited intervention, applies to taxation as to all other fields.

Article 49 must be strictly interpreted.

The principle of the limited powers of the European Coal and Steel Community further emphasizes that the provisions of the budget must be strictly interpreted.

The application of the provisions and principles so established may be reviewed by the Court. The applicants indeed claim that the absence of the normal guarantees afforded by Parliamentary control of the budget must be counterbalanced by a wide jurisdiction for the Court of Justice with regard to the protection of the individual interests of Community undertakings when the levy is fixed.

On the basis of those general factors the applicants maintain that:

The High Authority is nowhere empowered under the Treaty, not even under Article 50 (1), to establish funds financed by revenue from the levy;

The High Authority may not fix the levy at such a rate that it is possible to remit to special funds sums from the revenue produced by the levy;

Only sums not expended may be used as guarantee funds in accordance with Article 50 (1) of the Treaty (cover for the servicing of loans not covered by receipts from the servicing of loans granted by it); if it is unnecessary to use such to the revenue for the next financial year;

Article 51 (3) of the Treaty indeed enables a reserve fund to be established but only within the limits laid down by that provision.

According to the applicants the High Authority has failed to observe those rules.

a) The so-called ‘guarantee’ fund does not comply with the requirements of Article 51 (3). This fund has increased to its present amount of US $ 100000000 and has in practice been financed by the Community undertakings as a whole whilst Article 51 (3) of the Treaty makes clear that it is those undertakings which require a loan and generally they alone which must finance such an overdraft reserve. Furthermore, the guarantee fund does not really constitute an overdraft reserve because it is largely placed on short-term loans for. a maximum of five years. This shows that the High Authority really uses the guarantee fund as a means of establishing its credit-worthiness and the soundness of its issues with its creditors. Such an objective is quite simply incompatible with the Treaty establishing the European Coal and Steel Community since its authors stated clearly in Article 50 (1) and Article 51 (3) that they considered the general power to impose a levy (power of taxation) of the High Authority as a sufficient basis for the High Authority's system of borrowing. Even if it is conceded that the guarantee fund is lawful on the basis of the High Authority's arguments deriving from the Act of Pledge, the level of the fund is quite out of proportion. The High Authority has borrowed US $ 215000000 and the guarantee fund presently stands at US $ 100000000. According to banking practice a guarantee fund should not exceed five per cent of the liabilities which it covers. Accordingly the guarantee fund should amount to US $ 16000000 and the High Authority would have US $ 84000000 for its other adminstrative expenses.

b) The special reserve, which on 1 January 1959 amounted to more than US $ 22000000, is used to grant loans for second and third construction programmes for workers' housing. The special reserve was formed by transferring the net revenue from the interest from on sight deposits (US $ 18000000), from the interest on loans (US $ 250000) and fines and surcharges for delay (US $ 78000). The application of the special reserve is contrary to the Treaty because:

1) The interest produced by the funds of the levy and in particular by the investment of the guarantee fund is object to the same binding rules as those established by Article 50 (1) of the Treaty with regard to the levy. The interest can no more be used for granting loans than can the levy; the High Authority can only grant loans on funds which it has itself procured by loans, as is stipulated in Articles 51 and 54 of the Treaty. Although Article 50 of the Treaty does not expressly prescribe that interest produced by the levy funds should be treated as equivalent to revenue from the levy itself, this principle must nevertheless be conceded because: The High Authority cannot use the interest which it collects to obtain powers which are not expressly conferred upon it by the Treaty. Since this interest cannot be used for the granting of loans, it is available to cover the expenses of the Community laid down in Article 50 (1) of the Treaty and the High Authority thus possesses, apart from the US $ 84000000 already mentioned, more than US $ 18000000 in interest to meet its expenses.

a) It is an accepted rule of financial law that funds allocated for a specific purpose are subject to the same binding rules as the initial capital;

b) A different opinion would be at odds with the principle of the limited powers of the Community institutions, as the applicants have already stated.

2) Interest on overdue payments, being a surcharge on the levy, constitutes a part of the latter and the provisions of Article 50 (1) of the Treaty on the application of the levy apply to it in general.

3) Likewise the High Authority cannot be permitted to control the revenue obtained from fines which by analogy must come under the provisions of Article 50 (1) on the levy.

4) The High Authority has transferred to the special reserve US $ 258000 stemming from interest on loans: this is contrary to Article 51 (3) of the Treaty which lays down that the High Authority can only employ any proceeds from the grant of loans or of guarantees to reduce the amount of any levies provided for in the third subparagraph of Article 50 (1) of the Treaty.

5) The remainder of the special reserve was formed by transferring funds for re-search amounting to US $ 3000000 and a transfer of administrative funds amounting to US $ 720000. Since those sums constitute fractions of the levy, the applicants wonder whether the High Authority can break down these sums as it has, although they do not raise formal objections regarding the use to which the sums were put.

c) The High Authority has transferred a further US $ 500000 to an account entitled Estimate for the Expenses of Servicing Loans. The guarantee fund already covers any divergences which may occur between the re-payment of loans granted to undertakings and the High Authority's liabilities regarding loans. The applicants dispute that a specific provision is still necessary for servicing loans. Since the High Authority also has complete control over this fund the sum total thus amounts to the following: US $ 84000000— guarantee fund US $ 19182000— special reserve US $ 500000— estimates US $ 103682000 The defendant maintains that the Treaty must be interpreted in accordance with its provisions as a whole and not according to opinions which may be held on how it should or can be revised. It is thus wrong to rely on the principle of limited intervention in this connexion. That principle holds good for intervention on the market and in production but collection of the levy is by no means an intervention of this nature. It is also wrong to rely upon the ‘principle of the limited powers’of the Community. The question whether the accumulation of reserves is necessary to enable the High Authority to carry out its tasks does not relate to ‘powers’. The defendant also disputes the applicants' conclusion that the complete absence of parliamentary supervision must be counterbalanced by wide jurisdiction for the Court of Justice. The applicants' argument amounts in the present case to a criticism of the Treaty and this cannot provide grounds for an application. The defendant maintains that the applicants have misinterpreted the word ‘requires’ used in Article 49 of the Treaty. The concept which this word embodies is used to determine the transfer of the levy funds but is not intended to limit the rate of the levy, which may be reviewed by the Court. The undertakings may institute proceedings against the High Authority in order to obtain a ruling whether, with regard to the levies, it has acted outside its powers, thereby infringing the Treaty or the rules of law relating to its application. However this action is not open in connexion with the entirely different question whether the funds procured through the levy were required by the High Authority to carry out its tasks. In other words, an undertaking cannot use the expedient of the first paragraph of Article 49 to enlarge the legal protection against the decisions of the High Authority which is conferred upon it to a limited degree by the Treaty and thus claim to set up the Court of Justice as the controller of the financial policy and of the management of the High Authority because the undertaking considers that there are no other supervisors. With regard to the need to collect the levy the defendant further remarks that, even if the applicants' argument were justified, the levy would still be needed as there exist funds which cannot at present be released. The High Authority asserts that the guarantee fund cannot be reduced during the current financial year. Such a reduction would immediately affect the rate of bonds issued and in practice would preclude further issues. The special reserve was floated largely in the form of credits for a term of up to thirty-five years. Likewise, the estimates for the cost of servicing the loans cannot be applied at present, as will be indicated below. As to the lawfulness of the funds established the High Authority maintains that:

a) The guarantee fund has its legal basis in the third subparagraph of Article 50 (1) of the Treaty. According to this provision a deficit may be covered by means of the levy. When normal conditions prevail, the servicing of loans and the levy afford sufficient security but lenders demanded additional security to cover a serious crisis since the credit was granted for a period of twenty-five years. With this in view, when the market was favourable the High Authority set up a reserve, the guarantee fund, earmarked for those purposes. On the other hand, the High Authority, in the direct interest of the undertakings, has not exercised its power to set up a reserve fund. Section 606 of the Act of Pledge forms the direct basis of the guarantee fund. Without setting up this fund it would have been impossible for the High Authority to carry on its activities in connexion with loans for which provision is made by the Treaty. The amount of the fund had to be calculated so as to provide a foundation for the credit and the guarantee capacity of the Community. The fund thus has a function comparable to that of the capital of a company limited by shares.

b) The special reserve consists of resources of the High Authority which are not allocated under the Treaty. The conclusion which the applicants draw from the first subparagraph of Article 51 (1) constitutes inadmissible reasoning a contrario. The rule that resources deriving from loans must only be employed in granting loans is based on the principle that definitive expenditure must be covered only by actual resources. The fact that expenditure which is not definitive (credits) is covered by actual resources is not at odds with this principle since a binding allocation has not been made concerning them.

1) The general principles of law relied upon by the applicants do not seem to be conclusive. The budgetary law of the Member States is, on the contrary, based on the principle of non-allocation. An allocation is not to be presumed and must be expressly fixed; only in the exceptional cases of special funds are instances encountered where the interest is expressly allocated to such funds.

2) The payment of the interest on loans to the special reserve impugned by the applicants was lawful. In the present case it is not a question of surpluses deriving from lending borrowed capital at increased rates which should in fact have been paid to the reserve fund provided for in Article 51 (3) of the Treaty but of interest on loans granted on the special reserve which it was consequently proper to allocate to that reserve.

c) The estimate for the costs of servicing loans merely constitutes a sum which was provisionally frozen with the Bank of International Settlements in implementation of the provisions of the Act of Pledge. This is why the sum was given its separate entry. Negotiations are in progress to release it. As soon as the sum has been released this head will be abolished and the amount placed at the disposition of the High Authority as income on the same basis as the funds from the levy.

B. The submission concerning misuse of powers

In the event of the Court's considering that the High Authority has neither infringed the Treaty nor exceeded its powers in this matter, the applicants put forward the submission of misuse of powers. In fixing the levy for the eighth financial year and above all in its financial policy regarding the establishment of guarantee funds, investment funds and loan funds the High Authority has disregarded certain basic principles of budgetary law established by the Treaty. Taking into account the actual financial needs to be anticipated, the High Authority has, moreover, displayed a serious lack of foresight in fixing the abovementioned level of the fund and this also amounts to a misuse of powers.

The defendant replies that the ‘basic principles’ upon which the applicants rely have not been sanctioned by the Treaty, which provides for an independent financial structure. Thus the principle of minimum intervention cannot be invoked in this context because it relates only to interventions on the market.

With regard to the second complaint the defendant maintains that the establishment of the guarantee fund was necessary for the exercise of its activities concerning loans, as laid down in the Treaty. It was necessary to calculate the amount of the fund so that it could provide a basis for the guarantee and the credit-worthiness of the Community on the international financial markets.

4. Behaviour tending to establish the wrongful act or omission rendering the Community liable

At the end of their application the applicants adopt the third sentence of the first paragraph of Article 34 of the Treaty as the basis for proceedings to establish a wrongful act or omission of such a nature as to render the Community liable.

The submissions and arguments of the parties may be summarized as follows:

According to the applicants the High Authority was guilty of a wrongful act or omission because close examination of the provisions of the Treaty could not have failed to show that it was not empowered to impose the levy for the eighth financial year.

The defendant maintains that the applicants' application is out of time, as the reasons on which it is based only appear in the reply, are not relevant in themselves and must suffer the same fate as the main application. It further maintains that the applicants have completely failed to claim that they have suffered direct and specific harm.

The applicants reply that the damage which they have suffered consists in having to pay the levy at an excessively high rate as a result of the unlawful freezing of resources derived from the levy and the maintenance of the guarantee and special reserve funds. This constitutes specific harm because, owing to their unfavourable financial circumstances, they were obliged to obtain a loan in order to pay their contributions to the levy.

The defendant disputes that the need to obtain a loan can constitute specific harm, as has been alleged.

5. Evidence

The applicants have requested that an expert opinion be obtained regarding the level which the guarantee fund should attain.

The defendant has opposed this application which, in its view, ‘fails to recognize that the Treaty confers specific financial duties and powers upon the High Authority as a Community institution’.

The applicants have also requested, ‘in order to establish in detail the defects in the reasons advanced by the High Authority’, that the latter should be required to produce all the minutes of meetings and reports in its possession relating to the lawfulness of the guarantee fund and the use of the interest obtained from the levy for the grant of loans.

The defendant remarks that it is unnecessary to produce the said documents since it has stated its reasons to the Parliamentary Assembly and has published them in its general and special reports.

Application No 50/59

1. Admissibility of the application

The defendant asserts that the application is out of time. The application was received at the Court Registry on 11 November 1959, whilst the period of two months prescribed in the third paragraph of Article 35 began to run on 17 July 1959.

The applicant considers that the request under Article 35 of the Treaty was only made for the first time in its letter of 6 August 1959, whilst the defendant considers that this application can already be discerned in the applicant's letter of 17 July 1959.

The application is further inadmissible because, although it is an action for failure to act, it does not concern the same subject-matter as the request of 17 July 1959 and instead introduces a new dispute, completely different from the first. Whilst the letter of 17 July 1959 was intended to induce the-High Authority to take a decision granting the applicants reimbursement of the levy because of their difficult financial position, the application is intended not to gain such reimbursement but to obtain a ruling that General Decision No 33/59 is unlawful and consequently inapplicable.

The applicant replies that the letter of 17 July 1959 could not cause the period under Article 35 to begin to run because it did not intend to raise the matter with the High Authority within the meaning of the first paragraph of Article 35; the High Authority was only bound to take an individual decision after it received the letter of 6 August 1959. Even if it is considered that the applicant has already raised the matter with the High Authority through its letter of 17 July 1959, it must in any case be admitted that it has raised the matter a second time by its letter of 6 August 1959 and has also caused the period prescribed in Article 35 of the Treaty to begin to run.

The objection upon which the High Authority relies, namely that the action for failure to act does not relate to the same subject-matter as that of the previous request, is irrelevant. The fact that the request made in the letters of 17 July and 6 August 1959 took the form of a request for reimbursement is of little importance. The applicant was always concerned to obtain exemption from payment of the levy.

2. Substance

The applicant puts forward the same submission and arguments as in its application in Case 41/59.

The defendant maintains that in this case there is an additional reason for declaring that the objection of illegality is inadmissible. The purpose of the request in the letter of 17 July 1959 was to obtain reimbursement of the levy. This request was refused by the letter of 24 July 1959 on the ground that the relevant provisions did not allow such reimbursement. This refusal is not founded on General Decision No 33/59 but on the fact that there is no rule in Community law which allows the High Authority to grant reimbursement of the levy.

The applicant asserts that the High Authority's dismissal of its request means that, contrary to the wish expressed by the applicant, the High Authority persists in demanding payment of the levy fixed by General decision No 33/59.

In its reply the applicant maintains that it has been wrongly refused reimbursement of the levy. It concedes that the Treaty establishing the European Coal and Steel Community does not make express provision for exemption from the levy. Nevertheless, it cannot be deduced from this that it is unlawful to grant reimbursement of the levy. It should instead be admitted that the High Authority is empowered to exempt from the levy certain of the persons concerned, in that this is a basic element of the power to fix the levy conferred upon the High Authority by the Treaty without its being necessary to make special provision for such a power since there is a principle, which must be generally conceded, that a community or one of its institutions which has power to levy a public tax is also empowered to grant a refund of such a tax.

Since the High Authority has erred concerning its power to grant a refund, its decision rejecting by implication the applicant's request is vitiated by a defect in the exercise of its discretionary power.

The defendant considers that the submission is out of time since it was first made in the reply. It remarks further that the general principle ‘set out’ by the applicant is not found in the legal systems of all the Member States. On the contrary, in several Member States such a power to make refunds would be regarded as contrary to the principle of equality before the law.

IV — Procedure

The written procedure followed the normal course. The oral procedure was divided into two successive stages, one devoted to the questions of admissibility and the other to the questions concerning the substance of the case. The hearings took place on 5 May and 28 October 1960 respectively.

Grounds of judgment

Case 41/59

The application was lodged within the prescribed period.

The defendant has disputed first that the letter of 24 July 1959 constitutes a decision against which an application may be made. This letter contains the reply to the request made by the applicants on 17 July 1959 for a refund of the payment of the levy for the eighth financial year (1959 to 1960). The defendant stated that it refused the request because there is no provision in the rules in force for granting the individual refund requested by the applicants.

Since the refusal of this request was drafted in its final form it must be considered as a decision against which an application may be made.

Further the letter of 24 July 1959 ended in this way: ‘Consequently, you should advise the Ruhrkohlentreuhand GmbH that, as in the past, it must settle the levies payable by you and by Friedrich Thyssen Bergbau AG’.

The applicants are wrong in interpreting this sentence as a demand note for the levy. It must be read in conjunction with the letter of 17 July 1959 in which it constitutes a logical answer and in which the applicants gave notice that they would stop the payment of the levy since they anticipated a favourable reply. The Court interprets this sentence as the logical conclusion which follows from the refusal of the request and which the applicants could have drawn themselves whether or not this sentence had appeared in the letter.

Thus the abovementioned sentence, which does not introduce any new element into the legal relations between the High Authority and the applicants, cannot be regarded by the latter as a decision independent of the decision of refusal and against which an application may be made.

The applicants criticize the letter of 24 July 1959, maintaining that it contains a decision based on a general decision at variance with the Treaty, namely Decision No 33/59 fixing the rate of the levy for the year 1959-1960.

It must first be considered whether the letter of 24 July 1959 is actually based on the abovementioned decision.

The Court holds that it is not.

In fact the contested decision contains the reason that no provision for individual refunds is made either in the Treaty or in the general decisions of the High Authority on the payment of the levy.

Inasmuch as the contested decision is based on the general decisions of the High Authority, only basic decisions are involved establishing the conditions of assessment and collection in accordance with Article 50 (2) of the Treaty and in particular with Decisions Nos 2/52 and 3/52.

Decision No 33/59 does not form part of these decisions.

Whilst it is true that Article 1 of Decision No 33/59 lays down that ‘The levies provided for by Articles 49 and 50 of the Treaty shall be collected under the conditions fixed by the provisions and decisions in force until the expiry of the financial year ending on 30 June 1960’, this provision does not add any new legislative factor to the abovementioned decisions since it simply maintains the rate of the levy at the same percentage as that fixed for the preceding year. The applicant cannot claim that the contested decision of refusal is based on Decision No 33/59 and the objection of illegality which they invoke against this latter decision is inadmissible.

The applicants have finally requested the Court to hold in accordance with the first paragraph of Article 34 of the Treaty that the contested decision involves a wrongful act or omission capable of giving rise to liability on the part of the Community.

Article 34 clearly indicates that such a finding can only be made if the Court rules in favour of the main application for annulment. In the present case there can be no question of such a ruling since, as is clear from the foregoing, the application for annulment must be dismissed. This claim must thus be rejected as unfounded.

Since the applicants have not made any other submissions relating to annulment the application must be dismissed.

Application No 50/59

In its letter of 6 August 1959 the applicant first emphasized that the reply to its letter of 17 July 1959 came from the Levy Office and requested the High Authority to notify it, in accordance with the second paragraph of Article 15 of the Treaty, of the decision concerning the request for a refund which it submitted in its letter of 17 July 1959.

It is clear that the applicant decided to send this letter because it was uncertain as to the status of the letter of 24 July 1959 as a final decision and not because it was in doubt over its contents.

In those circumstances the objection raised by the defendant that the application is inadmissible because it is out of time must be rejected because the matter was raised within the meaning of Article 35 by the letter of 6 August 1959.

Nevertheless the defendant raises a second objection of inadmissibility, namely that the application does not concern the same subject-matter as the application of 17 July 1959.

When the matter was raised with the High Authority within the meaning of Article 35 it was asked to take a decision concerning the applicant's request on the basis of a specific legal ground.

The implied decision of refusal was taken within the context of this claim and of the legal ground pleaded.

An action brought against the implied decision of refusal which puts forward a different claim, based on a different legal ground is inadmissible.

In the applicant's letter of 17 July 1959 to which the letter of 6 August related exclusively, the High Authority was asked for a refund of the payment of the levy for the financial year 1959-1960 because of the difficult financial situation of the applicant.

On the other hand, the applicant, in its application instituting proceedings, really requests that the imposition of a levy for the current financial year should be declared unlawful because Decision No 33/59 is irregular, although formally it requests the annulment of the implied decision of refusal. This constitutes an important modification both of the claim and of the legal ground to which it relates.

For the abovementioned reasons the second objection of inadmissibility is well founded.

The applicant has finally requested the Court to recognize in accordance with the first paragraph of Article 34 of the Treaty that the contested decision involves a wrongful act or omission of such a nature as to render the Community liable.

The said Article 34 clearly indicates that such a finding can only be made if the Court rules in favour of the main application for annulment. In this case there can be no question of a finding of annulment since, as is clear from the foregoing, the Court considers that the application for annulment is inadmissible. This claim must also thus be dismissed as unfounded.

The application must accordingly be dismissed as inadmissible.

Costs

Since the applicants have failed in all their submissions they must bear the entire costs.

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 15, 33, 34, 35, 36, 49 and 50 of the Treaty establishing the European Coal and Steel Community; Having regard to the Protocol on the Statute of the Court of Justice of the European Coal and Steel Community; having regard to the Rules of Procedure of the Court ot Justice of the European Communities, THE COURT hereby:

1 In Case No 41/59 Dismisses as unfounded the application for annulment of the decision of the High Authority contained in the letter addressed to the applicants on 24 July 1959;

2 In Case No 50/59 Dismisses as inadmissible the application for annulment of the High Authority's implied decision of refusal to be inferred from its silence regarding the applicant's letter of 6 August 1959;

3 Orders the applicants to bear the costs of the proceedings.

1 Since the applicants do not know the exact amount of the revenue collected by the High Authority in surcharges, they have asked the Court to request the High Authority to state this. In its statement of defence the defendant maintained that up to 30 June 1959 the total surcharges collected by it amounted to 5038 units of account.