C-826/79

JUDGMENT OF 10. 7. 1980 — CASE 826/79 AMMINISTRAZIONE DELLE FINANZE DELLO STATO v MIRECO

CELEX: 61979CJ0826
Datum: 1980-07-10
Källa: eur-lex.europa.eu

In Case 826/79 REFERENCE to the Court under Article 177 of the EEC Treaty by the Italian Corte Suprema di Cassazione [Supreme Court of Cassation] for a preliminary ruling in the proceedings pending before that court between

THE COURT (Third Chamber) composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart, Judges, Advocate General: J.-P. Warner Registrar: J. A. Pompe, Deputy Registrar

gives the following

JUDGMENT

Facts and Issues

The facts and the observations submitted during the written procedure may be summarized as follows:

I — Facts and written procedure

By a judgment of 11 October 1978 the Corte d'Appello [Court of Appeal], Trieste, confirmed the judgment of a court of first instance in so far as it ordered the Amministrazione delle Finanze dello Stato to repay to MIRECO the sums paid by it in 1977 by way of charges for health inspections on. the occasion of imports of bovine animals from nonmember countries, effected in the period from 12 December 1964 to 31 December 1973. The Corte d'Appello ruled that such charges for health inspections were charges having an effect equivalent to customs duties and were prohibited by Community law. It declared in addition that the recovery of such sums by the traders in question was not incompatible with Community rules even after they had been passed on by the person who had paid them to a third party purchasing the imported goods.

The Amministrazione appealed to the Corte di Cassazione and claimed in particular that the recovery of sums paid but not owed (condictio indebiti) in relation to monies collected as import duties before they had been duly classified as charges having an effect equivalent to customs duties and the burden of which had in addition been passed on to third parties was contrary to Community rules.

The Italian Corte di Cassazione, taking the view that the action raised questions of the interpretation of Community law, stayed the proceedings in pursuance of Article 177 and referred the following questions to the Court of Justice for a preliminary ruling :

“(a) With regard to the basic principles of Community law concerning the free movement of goods, freedom of competition, nondiscrimination in tax matters and in particular with regard to the rules laid down in Articles 9, 12, 13, 92, 93 and 95 of the Treaty and, in respect of the system of guarantees provided by the Community system itself and in particular by Articles 171, 177 and 189 of the Treaty for the rights of persons which are safeguarded by those principles and rules, must the right of a person who has paid the charge in question to recover, from the State which has imposed it, with or without additional sums, the amount improperly paid be acknowledged unconditionally or prohibited unconditionally or upheld within specified limits and on given conditions (in which case what are those limits and conditions and which court, the Court of Justice or a national court, has jurisdiction to ascertain their presence in particular cases?) which the national legal systems, which may differ one from another, apply to the collection, provided for by the provisions of such systems, of charges on importation which are prohibited by the Community provisions as they may be interpreted initially by the national court and subsequently by the Court of Justice? (b) If in the reply to the foregoing questions it is ruled that there is a prohibition against such recovery, which alternative measures, capable of securing in practical terms before the national courts the right of the party who has suffered damage through making the undue payment, are compatible with Community law?”

The order for reference, which was made on 5 November 1979, was lodged at the Court Registry on 21 December 1979.

MIRECO, represented by N. Catalano of the Rome Bar, the Italian Government, represented by Mr Arnaldo Squillante, acting as Agent, assisted by A. Marzano, Avvocato dello Stato, and the Commission of the European Communities, represented by S. Fabro, a member of its Legal Department, acting as Agent, submitted written observations in pursuance of the second paragraph of Article 20 of the Protocol on the Statute of the Court of Justice of the EEC.

On hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to refer the case to the Third Chamber and to open the oral procedure without a preparatory inquiry.

II — Written observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

A — Observations of the respondent to the appeal (MIRECO)

On the question of the answer to be given to the first question, the respondent to the appeal objects to the argument which the Amministrazione delle Finanze attempts to base on the fact that the charges for health inspections were paid spontaneously under the impression, shared by all parties, that they were due, and that their payment was therefore the effect of a mutual mistake for which no blame could be attributed. It claims that the direct effect of the prohibition on charges having an equivalent effect is not subject either to intervention by the Commission or to a judgment given by the Court of Justice, whether given on the basis of Article 169, Article 170 or Article 177 of the EEC Treaty. A judgment of the Court, even if given on the basis, of Article 169, has a declaratory effect. Moreover, the case-law of the Court relating to charges having an equivalent effect dates from 1969 (judgment of 1 July 1969 in Case 24/68, Commission v Italian Republic, [1969] ECR 193) and has been applied in relation to charges for health inspections since 1972 (judgment of 14 December 1972 in Case 29/72, Marimex [1972] ECR 1309). In these circumstances it is not possible to speak of a “mistake for which no blame can be attributed” in relation to the imposition of charges for health inspections between 14 December 1972, the date of publication of the judgment in Case 29/72, referred to above, and the end of 1977, the time at which Law No 889 abolishing such charges was promulgated.

As regards the alleged incompatibility with Community law of the recovery of sums wrongly charged, MIRECO claims that the case-law of the Court has consistently stated that national courts “are required to protect” rights which directly applicable provisions confer on Community citizens. It follows that the Community rule prohibiting the levying of any pecuniary charge confers on those concerned the right not to pay the charge in question. If it has nevertheless been imposed the national courts can protect the rights of individuals only by making good the damage which has been suffered and by ordering the reimbursement of the sums improperly charged. Any other decision would make the prohibition of charges having an equivalent effect nugatory. Proceedings for a preliminary ruling would lose all point and individuals would have no incentive to undertake complex proceedings if every hope of obtaining a specific result were abolished.

Examining next the arguments based on the fact that traders who have paid the unwarranted charges in question have passed them on to purchasers from them, the respondent claims that such an assertion is certainly not based on fact since for traders not holding a monopoly position it is possible to transfer a charge to purchasers from them only if market conditions allow. In this case the goods concerned were agricultural products subject to the common organization of the market so that the prices for the products were rigidly aligned on one another by means where appropriate of specific correctives (compensatory amounts, levies on imports from nonmember countries, etc.). In any event, transfer of the unwarranted charge to purchasers is not relevant and constitutes no hindrance to the recovery of the sums improperly charged by the person who has paid them.

As regards the theory that the recovery of charges improperly levied constitutes an aid which is prohibited by Article 92 of the EEC Treaty, the respondent takes the view that it is not necessary to go deeply into this idea before rejecting the opinion put forward by the Amministrazione. In fact there is no question of favouring certain undertakings or the production of certain goods since the refund would not constitute a bounty from State resources but would only be the recovery of what had improperly formed part of State funds. If the sums wrongly charged were to be repaid by a private individual the Amministrazione would not support the argument in question and yet from the point of view of economics there is no distinction to be made between a private person or a public person required to reimburse sums improperly charged.

According to MIRECO, the argument pur forward by the Amministrazione is in contradiction with the case-law of the Court, in particular the judgment of 16 December 1976 (Case 33/76 REWE (1976] ECR 1989) and it is inconceivable that Community law should provide individuals with a lesser guarantee of their rights than that provided by national legal systems.

In reply to the Amministrazione, which cites in support of its case the judgment of 8 April 1976 (Case 43/75, Defrenne, [1976] ECR 455), the respondent emphasizes that the solution adopted by the Court in that judgment was by way of exception and cannot constitute a precedent for cases such as this one.

It remarks also that it is not possible to evade the duty of repayment on the basis of disparities between the different legal orders. That argument was rejected by implication by the Court in its judgment of 16 December 1976, REWE, previously referred to, and expressly by Mr Advocate General Warner in his opinion.

As regards the problem of the powers reserved for national courts MIRECO claims that by reason of the partial scope of the integration brought about by the Treaty of Rome the safeguarding of the rights conferred by Community rules should not only be entrusted to national courts but in default of a harmonization which is certainly desirable but has not yet been brought about, it would imply the application of procedures and rules peculiar to the different national legal orders which are not necessarily identical in all Member States. This idea is confirmed by the case-law of the Court of Justice in particular the judgment of 17 December 1970 (Case 33/70, S.p.A. SACE [1970] ECR 1213) and the judgment of 16 December 1976, REWE, which has previously been referred to.

B — Observations of the Italian Government

The Italian Government points out that the Court of Justice is already familiar with the question of principle raised by the national court thanks to Case 61/79, Denkavit and to Joined Cases 66, 127 and 128/79, Salumi and Others. Whilst awaiting the judgments of the Court in these cases the Italian Government recalls the broad lines of the observations which it has already presented on the occasion of those actions.

In the first place it remarks that the problem of the recovery, years after the date of their unwarranted collection, of sums the burden of which has already been transferred to third parties is coming more and more to the fore in Community affairs both as regards payments charged under Community law itself and those effected on the basis of provisions of national law. It seems necessary, even in the case-law of the Court of Justice, as is shown by the judgments delivered on 4 October 1979 in the Quellmehl cases, which were not published at the time the observations were made, to consider the problem from the point of view of liability and damage and consequently to agree to compensation only if and to the extent to which damage has actually been suffered by the individual. In this respect the Italian Government refers also to the observations submitted by the Commission in Case 130/79, Express Dairy Foods Ltd., which was brought before the Court on 10 August 1979 following a reference for a preliminary ruling from the High Court of Justice, Queen's Bench Division, Commercial Court.

The Italian Government strongly emphasizes that this is a question of Community law which concerns not only national charges levied in breach of Community law, but which covers all cases of undue charges imposed within the framework of the Community legal order and consequently also payments effected under Community rules subsequently declared invalid. A solution to this question of principle is all the more important since Council Regulation No 1430/79 on the repayment or remission of import or export duties (Official Journal L 175, p. 1), which is to enter into force on 1 July 1980, does not permit the settlement of cases of the kind raised in the present action.

For safeguarding individual rights encroached upon in the event of the levying of charges incompatible with Community law reasoning in terms of liability, damage and compensation rather than in terms of recovery of unwarranted payments would have the great advantage of resolving the different cases of undue charges from a unitary point of view and permitting a single solution of the problem which is satisfactory and nondiscriminatory without making the protection of the individual dependent upon divergent national rules.

The Italian Government further observes that if repayment may be excluded in case of a charge imposed by Community law but which is subsequently recognized as illegal, whereas, as may be deduced from the judgment in Granaria (13 February 1979, Case 101/78, [1979] ECR 636), it was not possible to refuse the payment of that charge as long as it had not been declared invalid, it is even more necessary to conclude that repayment may be excluded in the case of national charges which the individual in question might from the beginning have refused to pay.

In the context of the position of principle set out above account must necessarily be taken of the fact that the trader has been able to pass on to purchasers from him the charges which were wrongly levied. The objection that the various assigns of the importer would have to be permitted to take action for recovery and that the products in question are sold at imposed prices is not relevant. On the one hand that part of the price corresponding to the charge wrongly paid has no value of its own for the purchaser and on the other hand the determination of the imposed price took account of the charge unduly levied.

The Italian Government accordingly proposes that the reply should be that the recovery of sums paid by the importer in pursuance of Community rules subsequently declared invalid or on the basis of rules of national law incompatible with the Community rules may be demanded only if and to the extent to which the importer has suffered damage following the undue payment and only within the limits of the damage actually suffered.

C — Observations of the Commission

Before going on to consider the questions raised by the national court the Commission maintains that in this case there was no justification for the charges levied by the Italian Amministrazione delle Finanze dello Stato. From 12 December 1964 to 31 December 1973 MIRECO had to pay in connexion with imports into Italy of bovine animals from nonmember countries sums levied as charges for health inspections.

The provision authorizing these charges was abolished by Law No 889 of 14 November 1977 and the Corte Costituzionale [Constitutional Court] declared in its judgment No 163/77 of 29 December 1977 (Giur. Costituz. 1977 I, p. 1524) that that law was unconstitutional to the extent to which it provided for the application of such charges to products referred to by Regulation No 804/68 of 27 June 1968 on the common organization of the market in milk and milk products (Official Journal, English Special Edition 1968 (I), p. 176) and Regulation No 805/68 of 27 June 1968 on the common organization of the market in beef and veal (Official Journal, English Special Edition 1968 (I), p. 187). As what is involved in this case is beef and veal, Article 12 of Regulation No 14/64 on the progressive establishment of a common organization of the market in beef and veal (Journal Officiel 34, p. 1562) already forbade the levying of any customs duty or charge having an equivalent effect. Consequently what is at issue here is a charge levied in breach of a precise Community provision, a charge which the Italian legislature subsequently abolished, although somewhat belatedly, in its own domestic legal order.

(a) Interpretation of Articles 9, 12 and 13 of the Treaty

The Commission takes the view, with reference in particular to the judgment in Marimex (14 December 1972, Case 21/72, [1972] ECR 1309), that this case involves beyond any possible doubt charges which, by their nature, must be considered as charges having an equivalent effect.

However, it is important to determine what are the consequences involved for the Member State concerned in a declaration by the Court that a certain charge must be considered to be a charge having an equivalent effect. According to the Commission it follows from the settled case-law of the Court of Justice that such a prohibition produces direct effects in the legal relationships between the Member States and the individuals concerned and is capable of conferring personal rights upon them (judgment of 19 June 1973 in Case 77/72, Capolongo, [1973] ECR 611; judgment of 18 June 1975 in Case 94/74, IGAV, (1975] ECR 699 and judgment of 5 February 1976 in Case 87/75, Bresciani [1976] ECR 129).

The Commission thinks it advisable to stress that reimbursement is due solely because the charge was improper and that all other considerations are purely ancillary from the point of view of Community law.

The question of any unlawful enrichment of the undertaking obtaining the reimbursement is in any event a matter for the exclusive jurisdiction of the national court which can consider the matter only in the light of national law as any such rule is unknown to Community law.

If it were nevertheless necessary to pick out a rule of Community law in the matter it would be necessary to refer to the general principles of law and the Commission observes in this respect that reimbursement of sums paid but not owed is “automatic in all Member States save Denmark”. It follows that the obligation to reimburse charges wrongly levied is automatic save in exceptional cases (which the present is not) where equity imposes an obligation to place limits on reimbursement.

In the present state of Community law the duty of Member States to reimburse charges having an equivalent effect imposed in breach of Articles 9, 12 and 13 of the EEC Treaty must be performed in accordance with the provisions of their national law and in conditions which may not be less favourable than those relating to similar actions of a domestic nature (judgment of 16 December 1976 in Case 33/76, REWE, [1976] ECR 1989).

(b) Interpretation of Articles 92, 93 and 95 of the Treaty

As regards the assimilation of reimbursement to an aid within the meaning of Articles 92, 93 and 95 of the Treaty it is clear that recovery of sums paid but not owed cannot come within the scope of Article 92. The Commission refers in particular to the judgment delivered by the Court on 23 February 1961 (Case 30/59, De gezamenlijke Steenkolenmijnen in Limburg, [1961] ECR 1). The concept of aid financed by public resources presupposes that it is paid voluntarily by the State — a condition which is lacking in this case. Furthermore an essential element in the concept of aid is equally lacking, namely its gratuitous nature.

As regards Article 95, the Commission maintains that the arguments put forward with regard to the non-applicability of Article 92 apply equally to Article 95 in view of the fact that what is involved here is not a measure adopted by the State but a judicial decision requiring the administration to reimburse sums improperly charged.

(c) Interpretation of Articles 171, 177 and 189 of the Treaty

It is clear from the way in which the question referred to the Court has been framed that it is concerned primarily with the problem of the temporal effect of interpretative judgments of the Court under Article 177 of the Treaty and also with the limits which the Court meets with in this connexion.

The Commission first points out that Article 177 is based on a very clear distinction between the functions of the national courts and those of the Court of Justice and does not allow the latter to express an opinion on the facts of the case or to review the reasons for the request for interpretation. It follows from this that, whatever the decision of the Court may be, it is for the national court in each particular case to apply that legal principle to the specific case with all the attendant consequences.

The Commission goes on to point out that the question submitted by the court making the reference relates primarily to the applicability or non-applicability of a Community rule, in accordance with the interpretation given by the Court, to relations prior to the ruling. The Commission takes the view that, having regard to the nature and purpose of the reference for a preliminary ruling, the question can only be answered in the affirmative. Article 177 establishes close cooperation between the Court of Justice and the national courts so as to ensure uniform interpretation of Community law. The judgments of the Court under Article 177 clearly bind the Court a quo (judgment of 3 February 1977 in Case 52/76, Luigi Benedetti, [1976] ECR 163) but they do not prevent other courts from referring to the Court again for interpretation a question which has previously been answered (judgment of 27 March 1963 in Joined Cases 28 to 30/62, Da Costa en Schaake [1963] ECR 31); in accordance with that decision preliminary rulings simply have effect inter partes. However it is no less true that the Court's interpretation cannot avoid having an effect on the Community rule in question with the result that in practice it will have to be applied by every national court each time that it is invoked before it unless there is a fresh reference. The fact that the procedure is concerned with legal relations prior to the Court's judgment is immaterial. The view that the Court's rulings under Article 177 go beyond the case in point is confirmed by the case-law of the Court (judgment of 27 March 1963 in Joined Cases 28 to 30/62, Da Costa en Schaake mentioned above).

The validity ex tunc of the Court's interpretation stems also from the essentially declaratory nature of the rulings in question. The Court does not create a new rule but restricts itself to stating the meaning and limits of the existing rule. The opposite solution would deprive a rule of Community law of its effectiveness in the past and would manifestly be contrary to the purpose of a reference for a preliminary ruling, which is the uniform interpretation and application of the rules of the Treaty.

Since the principle of the validity ex tunc of an interpretation by way of a preliminary ruling has been laid down, it may be asked whether another principle of Community law which is related to overriding reasons constituted by legal certainty, the protection of legitimate expectation, good faith (involuntary mistake) and stability of legal relations might not set it at naught. According to the Commission these principles must not be applied to a reference for a preliminary ruling because otherwise such rulings would no longer produce their effects ex tunc but ex nunc; the effectiveness of a rule would vary in time, which would clearly not be in keeping with the objective of a reference for a preliminary ruling and with the declaratory nature of rulings under Article 177. The only precedent, which is provided by the judgment of 8 April 1976, in Case 43/75, Defienne [1976] ECR 455, has no relevance to this case, because in that case the Court had to deal with an exceptional situation. The Commission refers on this issue to the opinion of Mr Advocate General Warner in Case 33/76, REWE[1976] ECR 2000.

With reference to the second question the Commission takes the view that is has lost its purpose having regard to the solution which it advocates for the first question.

It suggests therefore that the Court should reply as follows:

“Community law, and in particular Article 12 of Regulation (EEC) No 14/64 and Article 22 of Regulation (EEC) No 805/68, grants individuals the right to obtain a refund of sums wrongly levied because they were charges having equivalent effect (in this case: charges for health inspections) after the elimination of the latter as a result of the entry into force of the abovementioned Regulation No 14/64 (1 November 1964). Refunding the amounts to those persons who had paid them when they were not owed is not incompatible with Community rules on the free movement of goods, the proper functioning of competition and nondiscrimination in fiscal matters and in particular it cannot be regarded as an aid within the meaning of Article 92 of the Treaty. It is for the Member States to arrange for the refund of charges levied in contravention of Article 13 (2) of the Treaty in accordance with the provisions of their domestic law under conditions which must not be less favourable than those relating to similar actions of a domestic nature and which, in any case, must not make the exercise of rights conferred by the Community legal order impossible in practice.”

III — Oral procedure

The respondent in the main action, represented by N. Catalano of the Rome Bar, and W. Viscardini of the Padua Bar, the Commission of the European Communities, represented by Mr Fabro, a member of its Legal Department, acting as Agent, and the Italian Government, represented by I. M. Braguglia, Avvocato dello Stato, acting as Agent, presented oral argument at the sitting on 5 June 1980.

The Advocate General delivered his opinion at the same sitting.

Decision

1. By an order of 5 November 1979, which reached the Registry of the Court of Justice on 21 December 1979, the Italian Corte Suprema di Cassazione, in pursuance of Article 177 of the EEC Treaty, requested the Court to give a preliminary ruling on the following two questions:

b) If in the reply to the foregoing questions it is ruled that there is a prohibition against such recovery, which alternative measures, capable of securing in practical terms before the national courts the right of the party who has suffered damage through making the undue payment, are compatible with Community law?”

2. Those questions have been referred to the Court in the course of actions brought by a trader against the Amministrazione delle Finanze dello Stato for repayment of charges for health inspections on imports of bovine animals from nonmember countries paid by that trader for the period from 12 December 1964 to 31 December 1973, in respect of which it is not disputed that they are charges having an effect equivalent to customs duties.

3. The prohibition with effect from 1 November 1964 (Regulation No 82/64 of 30 June 1964 (Journal Officiel 1964, p. 1626) on levying the charges in question is contained in Article 12 (2) of Regulation No 14/64 of the Council of 5 February 1964 on the progressive establishment of a common organization of the market in beef and veal (Journal Officiel 34 of 27 February 1964, p. 562) which was replaced with effect from 29 July 1968 by Article 20 (2) of Regulation (EEC) No 805/68 of the Council of 27 June 1968 on the common organization of the market in beef and veal (Official Journal English Special Edition 1968 (I), p. 187). There has been no contention that one of the exceptions to the prohibition question, for which provision is made in Article 20, applied during the period in question in relation to the importation of beef and veal from nonmember countries.

4. The purpose of the questions referred to the Court is in substance to find out whether Community law and, inter alia, the rules relating to the free movement of goods, the principles relating to the proper functioning of competition in the Common Market and finally the system of judicial protection of the rights contained in particular in Articles 171, 177 and 189 of the Treaty permit or require or possibly forbid — and if so upon what conditions — Member States to grant applications for repayment of national charges of the kind which are the subject-matter of the main action or whether, on the contrary, the matter is governed by the rules of the domestic law of each Member State.

5. The statement of the reasons on which the order making the reference is based shows that the questions referred to the Court have been submitted to elicit a reply covering the assumption that the contested charges were paid voluntarily without reservation for a long period by the traders concerned on the assumption common to them and to the national authorities that they were not open to criticism from the point of view of their compatibility with Community law. The incompatibility became apparent only gradually at a later date as a result of the interpretation given by the Court of Justice to the concept of charges having an effect equivalent to customs duties which led the Court for the first time to classify charges for health inspections in that way in its judgment of 14 December 1972 in Case 29/72, Marimex v Italian Finance Administration [1972] ECR 1309.

6. According to the established case-law of the Court, the prohibition on the levying of charges having an effect equivalent to customs duties, whether it has its origin in the general rule contained in Article 13 of the Treaty with effect from 1 January 1970, at the end of the transitional period, or in the special provision of Article 13 of Regulation No 14/64 with effect, as regards the products referred to by the regulation, from 1 November 1964, has a direct effect in the relations between the Member States and their subjects throughout the Community as from the date provided for the implementation of the provisions in question. As the Court stated in its judgment of 9 March 1978 in Case 106/77, Amministrazione delle Finanze dello Stato v Simmentbal S.p.A. [1978] ECR 629 p. 643, rules of Community law must be fully and uniformly applied in all the Member States from the date of their entry into force and for so long as they continue in force.

7. The interpretation which, in the exercise of the jurisdiction conferred upon it by Article 177, the Court of Justice gives to a rule of Community law clarifies and defines where necessary the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its coming into force. It follows that the rule as thus interpreted must be applied by the courts even to legal relationships arising and established before the judgment ruling on the request for interpretation, provided that in other respects the conditions enabling an action relating to the application of that rule to be brought before the courts having jurisdiction are satisfied.

8. As the Court recognized in its judgment of 8 April 1976 in Case 43/75 Gabrielle Defrenne v Société Anonyme Belge de Navigation Aérienne Sabena [1976] ECR 455, it is only exceptionally that the Court may, in application of the general principle of legal certainty inherent in the Community legal order and in taking account of the serious effects which its judgment might have, as regards the past, on legal relationships established in good faith, be moved to restrict for any person concerned the opportunity of relying upon the provision as thus interpreted with a view to calling in question those legal relationships.

9. Such a restriction may, however, be allowed only in the actual judgment ruling upon the interpretation sought. The fundamental need for a general and uniform application of Community law implies that it is for the Court of Justice alone to decide upon temporal restrictions as regards the effects of the interpretation which it gives.

10. It is necessary, however, to observe that where the consequence of a rule of Community law is to prohibit, on the dates and with the effects described above, the levying of national charges or dues, the safeguard of the rights conferred upon subjects by the direct effect of such a prohibition does not necessarily require a uniform rule common to the Member States relating to the formal and substantive conditions to which the contesting or recovery of those very diverse national charges is subject.

11. A comparison of the national systems shows that the problem of disputing charges which have been unlawfully claimed or the refunding of charges paid but not owed is settled in different ways in the various Member States, and even within a single Member State, according to the various kinds of taxes or charges in question. In certain cases, objections or claims of this type are subject to specific procedural conditions and time-limits under the law with regard both to complaints submitted to the tax authorities and to legal proceedings.

12. In other cases, claims for repayment of charges which were paid but not owed must be brought before the ordinary courts, mainly in the form of claims for the recovery of overpayments. Such actions are available for varying lengths of time, in some cases for the limitation period laid down under the general law, with the result that Member States involved may be faced with an accumulation of claims for a considerable amount where certain national tax provisions have been found to be incompatible with the requirements of Community law.

13. It follows from the judgments of 16 December 1976 in the REWE and Comet cases (Case 33/76 and Case 45/76 [1976] ECR 1989 and 2043 respectively) that, applying the principle of cooperation laid down in Article 5 of the EEC Treaty, it is the courts of the Member States which are entrusted with ensuring the legal protection which subjects derive from the direct effect of the provisions of Community law. In the present state of Community law and in the absence of Community rules concerning the contesting or the recovery of national charges which have been unlawfully demanded or wrongfully levied, it is for the domestic legal system of each Member State to designate the courts having jurisdiction and determine the procedural conditions governing actions at law intended to safeguard the rights which subjects derive from the direct effect of Community law, it being understood that such conditions cannot be less favourable than those relating to similar actions of a domestic nature and that under no circumstances may they be so adapted as to make it impossible in practice to exercise the rights which the national courts have a duty to protect.

14. It should be specified in this connexion that the protection of rights guaranteed in the matter by the Community legal order does not require an order for the recovery of charges improperly levied to be granted in conditions such as would involve an unjustified enrichment of those entitled.

15. The system of protection which subjects thus have as a result of the direct effect of the provisions of Community law in conjunction with the special features of national laws which govern in the various Member States matters of form and substance in relation to challenging national taxes or recovering those which have been paid without being owed cannot be regarded as incompatible either with Articles 9, 12, 13, 92, 93 and 95 of the EEC Treaty or, in a more general way, with the principles of Community law relating to the free movement of goods, the establishment of a system ensuring that competition within the Common Market is not distorted or the prohibition of discrimination in tax matters. The provisions referred to in the order making the reference do not preclude differences in treatment resulting from the differences between the national tax laws especially in relation to contesting national taxes.

16. The answer to the questions referred to the Court by the Corte Suprema di Cassazione must therefore be that: (a) In the absence of Community rules concerning the contesting or the recovery of national charges which have been unlawfully demanded or wrongfully levied by reason of their incompatibility with Community law, it is for the domestic legal system of each Member State to designate the courts having jurisdiction and determine the procedural conditions governing actions at law intended to safeguard the rights which subjects derive from the direct effect of Community law, it being understood that such conditions cannot be less favourable than those relating to similar actions of a domestic nature and that under no circumstances may they be so adapted as to make it impossible in practice to exercise the rights which the national courts have a duty to protect; (b) There is therefore nothing, from the point of view of Community law, to prevent national courts from taking account in accordance with their national law of the fact that it has been possible for charges unduly levied to be incorporated in the prices of the undertaking liable for the charge and to be passed on to the purchasers.

Costs

17. The costs incurred by the Italian Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision as to costs is a matter for that court.

On those grounds, THE COURT (Third Chamber), in answer to the questions referred to it by the Italian Corte Suprema di Cassazione by an order of 5 November 1979, hereby rules: