JUDGMENT OF 30. 9. 1982 — CASE 108/81 AMYLUM v COUNCIL

In Case 108/81

THE COURT (Second Chamber) composed of: O. Due, President of Chamber, A. Chloros and F. Grévisse, Judges, Advocate General: G. Reischl Registrar: H.A. Rühi, Principal Administrator

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure and the conclusions, submissions and arguments of the parties may be summarized as follows:

I — Facts and written procedure

A — Background to the dispute

1. By a preliminary ruling of 25 October 1978 given in Joined Cases 103 and 145/77 Royal Scholten-Honig (Holdings) Limited v Intervention Board for Agricultural Produce; Tunnel Refineries Limited v Intervention Board for Agricultural Produce [1978] ECR 2037 the Court of Justice held that Council Regulation No 1111/77 of 17 May 1977 laung down common provisions for isoglucose was invalid to the extent to which Anieles 8 and 9 thereof imposed a production lew on isoglucose ot five unus of account per ICC kg of dry matter for the period corresponding to the sugar marketing year 1977/78. The Court stated, in fact, that the system established by the above-mentioned provisions offended against the general principle of equality (in that case as between sugar producers and isoglucose producers). The Court added, however, that the ruling left the Council free to take any necessary measures compatible with Community law for ensuring the proper functioning of the market in sweeteners.

2. Following that judgment, on 25 June 1979 the Council adopted, on the basis of a proposal for a regulation drawn up bv the Commission, Regulation No 1293/79 (Official Journal L 162, p. 10, with corrigendum in Official Journal L 176. p. 37) amending Regulation No 1111/77. That regulation entered into force, pursuant to Amele 5 thereof, on 1 July 1979.

3. Regulation No 1293/79 amended Regulation No 1111/77 m the light of tne ludgmen'. of the Court of Justice of 25 October 1978 In view of the fact that the most appropriate means for avoiding inequality ol treatment was to subiect isoglucose production to rules analogous to those applying to sugar production until 30 June 1980, Regulation No 1293/79 introduced inter alia for the same period a temporary system of isoglucose production (cf. sixth recital). The seventh recital justifies the rules for allocating and fixing the quotas. The eighth recital states that it is necessary to fix a specific amount of the production levy applicable to isoglucose production. The various statements made in those recitals are given practical effect in the system provided for in Article 3 of the regulation whereby under Article 7 of Regulation No 1111/77, is inserted Title II entitled “Quota arrangements”. Article 4 of the regulation provides that Annex II hereunder shall be added to Regulation No 1111/77:

“ANNEX II Undertaking Address of registered office Baste quota in tonnes expressed as dry matter Maizena GmbH 2000 Hamburg 1, Postfach 1000 28000 Amylum SA 49. Rue de l'Intendant, 1020 Bruxelles 56667 SA Roquettes Frères 17, Boulevard Vauban, 59000 Lille 15887 SPAD 15063 Cassano Spinola, Alessandria, Casella Postale 1 5863 Fabbriche Riunite Amido Glucosio Destrina SpA Piazza Erculea 9, Milano 10706 Tunnel Refineries Ltd Thames Bank House, Greenwich, London SE 10 OPA 21696”

4. By separate judgments of 29 October 1980 delivered in Case 138/79 SA Roquette Frères v Council of the European Communities [1982] ECR 3333 and Case 139/79 Maizena GmbH v Council of the European Communities [1982] ECR 3393 the Court declared Regulation No1203/79 to be soid lor infringement of essential procedural requirements on the ground that tne regulation had been adopted on 25 June 1975 in the absence oi the Parliament's opinion required by Amele 43 of the Treaty, on the proposal which had been referred to the Parliament on 19 March 1979. However, in the statement of the grounds upon which the judgment was based, the Court rejected all the substantive arguments adduced against the system of production quotas introduced by that regulation and in particular against the basic quotas fixed for the applicants in the two cases.

5. By Council Regulation (EEC) No 1592/80 of 24 June 1980 (Official Journal L 160, p. 12), which was adopted while Cases 138/79 and 139/79 were pending before the Court, the Council declared that the system of production quotas for isoglucose as laid down by Article 9 of Regulation No 1111/77 (as amended by Regulation No 1293/79) was to apply during the period from 1 July 1980 to 30 June 1981.

6. By an application, which was lodged at the Court Registry on 21 August 1980, Roquette Frères, a company incorporated under French law, which manufactures amongst other products isoglucose in its factory at Lestrem (Pas-de-Calais), requested the Court to “declare invalid” as against it Article 2 of and Annex II to Council Regulation (EEC) No 1592/80 of 24 June 1980 on the application of the system of production quotas in the sugar and isoglucose sectors during the period from 1 July 1980 to 30 June 1981.

7. A similar action was brought on 5 August 1980 against those provisions by Maizena, a company incorporated under German law.

8. Those cases were registered at the Court under Nos 179/80 for Roquettes Council and 176/80 for Maizena v Council.

9. On 10 January 1981, that is to say while Cases 176 and 179/80 were pending before the Court, the Council, after obtaining the opinion of the European Parliament which was delivered on 9 February 1981, adopted the following two regulations. (a) Regulation (EEC) No 387/81 (Official Journal L 44, p. 1) amending Regulation No 1111/77 laving down common provisions for isogiucose Bv means ol a reference to the orovisions of Regulation No 1111/77 thai regulation reinstates infer alia the svstem of production quotas with retroactive effect to 1 July 1979, b) Regulation (EEC) No 388/81 (Official Journal L 44, p. 4) amending Regulation No 1592/80. According to the second recital in the preamble to that regulation it was adopted “in order to avoid any doubts as to the legality of ... Regulation No 1592/80”. Article 1 of Regulation No 388/81 amends Article 2 of Regulation No 1592/80 which refers in its turn to Article 9 of Regulation No 1111/77. The object of that amendment was to extend the system of isoglucose production quotas to the marketing year 1980/81. Under the terms of Article 2 thereof Regulation No 388/81 is to apply from 1 July 1980.

10. By order of 2 April 1981 the Court took note that Maizena GmbH wished to withdraw its action in Case 176/80 and ordered the case to be removed from the Court Register.

11. Case 179/80 is, however, still pending before the Court.

B — Procedure

1. By an application lodged at the Court Registry on 4 May 1981 G. R. Amylum NV requested the Court to declare void Council Regulation (EEC) No 387/81.

2. In us defence dated 30 June 1981 which was received at the Court Registrv on 1 July 1981 the Council maintained that the application was unfounded.

3. The applicant lodged itsus reply at the Court Registry on 14 August 1981

4. By an application received at the Court Registry on 29 July 1981 theCommission requested the Court to allow it to intervene in support of the Council. By order of 30 September 1981 the Court, on hearing the views of the Advocate General, decided to accede to the Commission's request to intervene. By intervention received at the Court Registry on 17 November 1981 the Commission maintained that the Council's position was well founded.

5. The Council of the European Communities lodged its rejoinder on 17 October 1981.

6. The applicant lodged its answer to the intervention of the Commission on 8 January 1982.

7. On hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

8. By an order of 24 March 1982 the Court, having heard the views of the Advocate General, decided, pursuant to Article 95 (1) and (2) of the Rules of Procedure, to assign the case to the Second Chamber.

II — Conclusions of the parties

1. By an originating application G. R. Ąmvlum.W' ciaimł that the Court should (a) declare this application to be admissible and well rounded; (b) consequently, declare void Council Regulation No 3S7/SI of 10 February 1981 amending Regulation No 1111/77 lavinę down common provisions for isogiucose or at the ver\ieast. declare void Article I (3) and (4) ot that regulation. (c) order the Council to pav the costs

2. In its defence the Council of the European Communities contends that the Court should dismiss as unfounded the application brought by the applicant and order the applicant to pay the costs.

3. In its intervention the Commission supports the conclusions of the Council seeking. (a) the dismissal of the application; (b) an order that the applicant should pay the costs.

4. In its reply the applicant maintains its conclusions. Furthermore, the applicant at the same time invokes a new ground of nullity and in substance seeks a declaration by the Court that the creation of the production levy on isoglucose is illegal on the ground that the Council has exceeded its powers and contravened Article 201 of the EEC Treaty.

5. In its rejoinder the Council of the European Communities maintains the conclusions which it presented in its defence. Furthermore it requests the Coun to declare the new ground invoked by the applicant to be inadmissible and, in the alternative, to declare it to be unfounded.

6. In its answer to the observations of the intervener, the applicant maintains its conclusions.

III — Submissions and arguments of the parties

First submission : breach of the general principle that legislation may not be retroactive

I. The applicant maintains that the Council has contravened the generalprinciple that laws may not be retroactive by reinstating the quota and levy system for the production of isoglucose during the marketing year 1979/80. That general principle is embodied in most of the legal systems of the Member States of the Community and therefore, as the Court acknowledged in its judgment in Case 17/67 Neumann v Hauptzolkmt Hof [1967] ECR 441, applies to Community institutions when they draft legislation. According to the applicant all the national legal systems and the Community legal order distinguish “true” retroactivity (application of a legislative measure to a transaction completed entirely in the past) from “material” retroactivity (application of a legislative measure to the future consequences of situations which came into existence under an earlier law) to establish in principle the prohibition of true retroactivity. In fact, derogations from the principle of the prohibition of retroactive legislation are generally more apparent than real and concern only a limited number of cases such as interpretative or declaratory laws. (a) According to the applicant. Community law, as it has been elucidated by the case-law of the Court, follows that concept by laying down the principle that Community measures may not be retroactive save in exceptional cases where the purpose to be achieved by the legislature so demands and where the legitimate expectations of those concerned are duly respected Tha: is particularly so in the case of monetārs compensator. amounts the scheme of which implies thai the measure provided tor ma\appiv for a short period to situations which have occurred prior telhe entry into lorce ol the instrument laying down those measures ici. decisions of the Court in Cases 74/74 Comptoir Saitonal Technique Agncole v Commiiiion [1976] ECR 797, 7/76 IRCA v Amministrazione delle finanze dello Stato [1976] ECR 1213, 111/63 Lemmerz-Werke v High Authonty [1965] ECR 677 and 98/78 Račke v Hauptzollamt Mainz [1979] ECR 69). However, although the Court, according to the applicant, had never had to pronounce upon the lawfulness of true retroactivity, its judgments in Cases 100/63 Kalibeek v Sociale Verzekeringsbank [1964] ECR 565 and 88/76 Société pour l'Exportation des Sucres SA v Commission [1977] ECR 709 might allow the conclusion to be drawn that the general rule is to preclude Community regulations from having retroactive effect. Moreover, the applicant considers that the fact that the Court has recognized retroactivity in the sphere of monetary compensatory amounts does not amount to an acknowledgement of the lawfulness of retroactivity in general, in view of the fact that the retroactive effect conferred, for a short period, on the regulations relating to monetary compensatory amounts is indispensable to the whole system of that machinery. As such, that effect might thus be described as a “false exception” to the principle of the non-retroactivity of Community measures. (b) The national legal systems of the Member States of the Community for their part “unanimously embody” the prohibition of retroactively imposing charges on citizens. That is particularly the case with the German legai svstem wnere, according to the well-established authority of the Bundesverfassungsgericht [Federal Constitutional Counj. laws which impose obligations retroactively are “incompaiiblr ai:h :hr requirements of the rule of la ”. although tne principle of the non retroactivas o: lecivianon is not tormallv laid down ir. the German Basic Law. The case-law ot tne Bunsevfassungsgenchi clearlv demonstrates ihat legislation may be retroactive onu a nere the legitimate expectation o: tnr citizen has beenprotected. In that connection it is not sufficient that draft legislation has been made public; according to that case-law, there must necessarily be a decision of the legislature, that is to say a vote by the Bundesug [Lower House] in favour of the adoption of a retroactive law. Moreover, the Bundesverfassungsgericht has “particularly insisted” on the need to safeguard the principle that fiscal legislation may not be retroactive. According to the applicant, contested Regulation No 387/81 comes close to being a fiscal law since it introduces a production levy on isoglucose which is “parafiscal” in nature. The Bundesverfassungsgericht certainly allows a number of exceptions to the principle that legislation may not be retroactive but in the present case none of those exceptions may be relied upon to sanction the flagrant breach by the Council of the principle that legislation may not be retroactive. In any event it cannot be denied that respect for the principle that legislation imposing charges may not be retroactive is ensured with “exceptional vigilance” by the Bundesverfassungsgericht. Apan from Norway where Article 97 of the Constitution expressly prohibits the retroactivity of laws in civil matters, the legal systems of other countries in Europe admit of the principle that legislation may noi be retroactive only in an attenuated form in the sense that, in the absence of a constitutional court, the courts are powerless to combat the retroactivity of legislation. Consequently, save in fiscal matters where the principle that legislation mav not be retroactive is sacrosanct, legislation is permitted to have retroactive effen where the will of the legislature to that effect is clearly expressed. On the other hand the courts and tribunals are particularly vigilant against the retroactivii)' of orders and regulations, save in the case of express legislative authorization. On that point the applicant concludes that, in the absence of effective parliamentary control over the legislative or “quasi-legislative” activities of the Council it is particularly important that the Court's power of review be exercised in the widest possible manner. For that reason the applicant considers that the Court, by virtue of its judgment in Case 4/73 Nold v Commission [1974] ECR 491, in exercising that review, is bound to draw inspiration from the constitutional traditions common to the Member States and to “apply the maximum standard of protection recognized by national constitutional laws”. In that respect the applicant observes that the Treaty, by instituting two specific rights of action, namely the action for failure to act under Article 175 and proceedings for nullity under Article 173 the Treaty did not wish to assimilate the Council to a “legislature”. The right enjoyed by those concerned directly to challenge the legislative activity of the Community is intended to compensate for the inadequacy of a parliamentary review of the Council's activities and confirms the need to subject the Council to a degree of judicial review which is as wide as that exercised at national level over the exercise of the power to issue regulations. (c) The applicant then considers the arguments in favour of considering the retroactivity of Regulation No 3S7/81 to be lawful. It concludes that those arguments must be reiected. First it cannot be said that the retroactivity of Regulation No 387/81 is justified by overriding considerations of public interest requiring the legal vacuum resulting from the nullity of Regulation No 1293/79 to be filled. In fact that legal vacuum had no harmful effect on the Community public interest since Regulation No 1293/79 remained applicable until its nullity was pronounced by the Court. The objective pursued by the regulation, namely a restriction of the production of isoglucose in the Community, was therefore achieved. In that respect the applicant states that the reimbursement of levies already paid would not alter the conditions of competition as between sugar producers and isoglucose producers. The applicant's production capacity which had already been restricted by the quotas mandatorily fixed by the Council, could only be increased by the introduction of new production investment. No such project is however envisaged since the production capacity has already been increased by a better utilization of the existing plant and an increase in performance resulting from a modification to the manufacturing process. Furthermore, the applicants find u difficult to understand that the public interesi requires the Council to give retroactive effect to Regulation No 3S7/81 whilst that possibility was not envisaged bv the Council when it adopted Regulation No 1293/79 succeeding Regulation No 1111/77 which had been declared invalid b\the Court At the very least it is excessne to maintain, as doc the Council, mat if Regulation No 3S7/SI acre no: to be retroactive the legaluv ot me rules governing isoglucose production would be undermined and the Council tor that reason would no longer ha\e available to it the data which it needs for reference purposes such as the production quotas of previous years. In fact, it falls within the discretionary powers which the Court has recognized the Council as enjoying in the management of the common agricultural policy to be able to reassemble those data. In the same way, it is wrong to maintain, as do the Council and Commission, that reimbursement of the levy already paid would lead to an unjustified enrichment of isoglucose producers and, by the same token, an increase in the charges imposed on sugar producers. The applicant states that, in the context of an action for nullity, such considerations are immaterial; for its action to be admissible it is sufficient if the applicant can show a legal interest and, for the measure to be declared void, it is sufficient if the measure reveals defects of such a nature as to call in question its validity. On the other hand, the applicant points out that reimbursement of the levies as a result of nullity would no doubt not be sufficient to cover the losses incurred by reason of the contested regulations. In that connection it puts forward figures which show that reimbursement of levies received following the nullitv of Regulation No 1111/77 (Cases 1C3 and 145/77) did not compensate it for the damage which it suffered from the application of that regulation. It was unable to obtain compensation for that damage since the action which it brought in Case 116/77 was dismissed (judgment ot' 3 December 1979). Finally it is also wrong to claim that reimoursement oí me levy paid would increase the share ot the levy imposed on sugar producers By virtue of Article 27 í3i ot Regulation No 3332/74 of the Council of 19 December 1974 (Official Journal L 359, p. 1) the B sugar levy could not in any event exceed 30% of the intervention price, or, for the marketing year 1979/80 in question, 12.33 European currency units (ECU) per 100 kg. Since the levy for that period was fixed bv Article 1 of Council Regulation No 3103/80 of 28 November 1980 (Official Journal L 324, p. 62) at 12.3 ECU per 10C kg, an increase in the latter would be impossible given that the principle of coresponsibility, which enables the B sugar levy to be increased in respect of the following year where the levy for the year in progress is insufficient to cover the losses incurred, was onlv introduced with effect from 1 July 1981 bv Article 28 (3), (4) and (5) of Council Regulation No 1785/81 of 30 June 1981 (Official Journal L 177, p. 4). On the other hand, it cannot be said that compliance with the judgment of the Court declaring Regulation No 1293/79 void required the Council to make Regulation No 387/81 retroactive. Regulation No 1293/79 was indeed declared void on a ground of external illegality which did not affect the Council's ability to readopt the substance of the regulation declared void. No inference may, however, be drawn from the ludgment of the Court that the new regulation was to have retroactive effect. Finally it is wrong io take the view at tne retroactive effect conferred on Regulation No 387/81 did not frustrate the legitimate expec:.::ion of isoplucosrproducmg undertakings To accept that traders in that sector were warned. by the existence of Regulation No 1293/79. of the legislature's intention to institute a svstem of quotas and levies in respect ofthe period prior to the entry into force of Regulation No 387/81 would be contrary to the very principle of declarations of nullity by the Court. A declaration by the Court of the nullity of a measure has precisely the effect, under the first paragraph of Article 174 of the EEC Treaty, of rendering the contested measure “void”; the contested measure could not therefore have had the effect of a warning to the applicants as regards their legitimate expectation. Furthermore, the existence of Regulation No 1293/79 was not in itself a factor of such a nature as to alert traders to the retroactive adoption of a new regulation, any more than was the publication on 20 December 1980 — that is to say several months after expiry of the 1979/80 marketing year — of a proposal by the Commission nowhere indicating, according to the applicant's analysis, the legislature's intention to adopt a regulation having retroactive effect. On the contrary, the legitimate expectation of the traders was bolstered by the fact that the Council did not intend to confer retroactive effect on Regulation No 1293/79 even though that was, according to the Council itself, legally conceivable. (d) On the contran, it must be stated that, by arrogating to itself the power to make Regulation No 387/81 retroactive, the Council gravely disregarded the authoritv of the European Parliament and the Court of Justice. BY readopting, with retroactive effect, a measure identical to the one declared void for failure to consult the Parliament, the Council is reducing the duty of consultation laid down in Article 43 (2) of the EEC Treaty to the status of a secondary formality and thus fails to respect the role of the Parliament, as provided for in particular in Article 137 of the EEC Treat), in the institutional equilibrium of the Community. In the same way, the Council cannot rely on the agreement of the Parliament to confer retroactive effect without acknowledging that the Parliament has “a right of veto incompatible with the purely consultative nature of its participation in the Community legislative process”. The Council could not, in the present case, adopt retroactive legislation without infringing the second paragraph of Article 174 of the Treaty according to which it is for the Court to determine the temporal consequences of its judgment of nullity. Since the Court, in declaring Regulation No 1293/79 void, did not make use of that power the Council could not revive, by means of Regulation No 387/81, the system laid down by Regulation No 1293/79, in respect of which the declaration of nullity by the Court meant that it was deemed never to have existed. In that respect it is no: possible to put forward, as the Council, not witnout some contradictions attempts to do, arguments as to the nature of the measure declared void bv the Court, as to nether it is an individual or general measure, or as to whether the authority responsible tor the measure is a legisiatue or administrative one. in order to seek io limit the effects ot the decision orearme Recuiation No l293/79 void Ir.ic: Commumiv lau, in me same wav as national laws, embodies the principie of lhe prohibition of the retroactive application at measures imposing cnarges on emmens and requires the authors of the measure declared void not to readopt the same regulation with retroactive effect. This must be particularly so in the fiscal sphere and it cannot be maintained that the assignation of a revenue receipt or the objective pursued by its author alters its fiscal character which stems from the rules laid down for its charging. In the present case the isoglucose production levy was charged compulsorily and its objective — distributive justice or pursuit of an objective of economic policy — does not alter its mandator) nature as regards those subjected to it. In the applicant's view, the decision to make Regulation No 387/81 retroactive was thus taken merely on the basis of considerations of political expediency without the legislature's concerning itself with respect for fundamental rights and the legal certainty of the traders concerned. Such an attitude has the effect of removing all efficacy from the judgments of nullity given by the Court, creates a situation of permanent legal uncertainty and confers on the Council, in defiance of the law, a discretionary power to decide whether to confer retroactivity on measures adopted by it, whenever a measure, which has been declared void, has existed in that sphere.

2. The Council of the European Communities, the defendant, considers for its part tnat the case-law of the Court clearK demonstrates, in particular in its ludement in Case 98/78 Racke [1979] EC R ö9 at paragraph 2Z thai retroactive Communis measures are bv no means exciuded as a matter of principle. However, tne Court has sought to make retroac:i\e Community measures subiect io judicial review to ensure that they obsen r in particular the following conditions: (a) first, the protection of legitimate expectation on the part of those concerned where such expectation is present; (b) secondly, the retroactivity of the legislation must be necessary so as to satisfy the aim pursued by the legislation in question or to meet a need overriding general interest. The Council considers that these conditions as defined have been observed in the present case. (a) There can be no legitimate expectation on the part of the applicants in view of the circumstances in which Regulation No 1293/79 was declared void and in the light of the consistent approach of the Community institutions in this matter. In fact, isoglucose producers had known since 17 May 1977, the date of entry into force of Regulation No 1111/77, of the Community's intention to adopt restrictive measures with regard to the production of isoglucose. That intention has since then been clearly confirmed by legislative activity (cf. Regulations Nos 1111/77, 1293/79, 1592/80387 and 388/81) and in the attitude adopted by the Community institutions. The existence of legitimate expectation on the pan of isoglucose producers of the abolition, as regards the past, of the regulations relating to isoglucose would tnus only be conceivable if the Court had condemned that policy in principle. The ludgment declaring Regulation No 1111/77 to be void was restricted to condemning the method of calculating the isoglucose production lew and not the principle ot the lew. In that context it was thus conceivable, from a legal point of view, that the Council might amend Regulation No 1111/77 with retroactive effect. For “reasons of advisability from the point of view of policy” the Council declined to adopt that solution and adopted instead Regulation No 1293/79 whose substantive conformity with Community law was clearly upheld by the Court in its judgment in Joined Cases 138 and 139/80. Indeed, by that decision the Court, it is true, annulled Regulation No 1293/79 for infringement of essential procedural requirements but rejected all the substantive complaints alleged by the applicants against the principle of a levy imposed on the production of isoglucose. The legality of the principle and the procedural steps taken by the Council were thus consistently confirmed and the Council was therefore entitled to reintroduce the disputed levy with retroactive effect to the marketing year 1979/80. In the Council's view, the contested measures are of a “mixed” nature inasmuch as they contain legislative provisions of general application, such as the laying down of abstract criteria for organizing production and allocating quotas, and provisions which may be considered to be individual decisions such as provisions allocating production quotas to each manufacturer in the Community. The “mixed” nature of the contested regulations explains why the Court did not seek to limit the temporal effects of its declaration that, on the ground of infringement of essential procedural requirements. Regulation No 1293/79 was void. Indeed it is clear from the terms of Article 174 of the EEC Treaty that that possibility is confined merely to purely legislative measures. The Court was thus not able to apply that provision to declare its consent to the maintenance in force of Regulation No 1293/79. However, the reaction by the Court of all the substantive allegations made by the applicants in Cases 138 and 139/80 is sufficient to support the Council's viewthat its action was not in itself reprehensible and that the charging of levies was lawful in principle as from the marketing year 1979/80. In that connection it should be recalled that the Court held, in its judgment in Case 101/78 Granaria [1979] ECR 623 that regulations are to be applied as long as the Court of Justice has not taken a decision with regard either to their legality (Article 173 of the Treaty) or their validity (Article 177 of the Treaty). Thus Regulations Nos 1293/79 and 1592/80 were to be given full effect as regards inrer alia the charging of the levy until the delivery' in October 1980 of the judgment declaring them to be invalid. In those conditions the Council considers that neither de jacto nor de jure was there any legitimate expectation worthy of protection. In its judgment in Cases 138 and 139/80 the Court not only rejected all the substantive allegations made against the measures adopted by the Council but it also added that those measures were fully justified during the marketing year 1979/80 and invited the Council to takç all appropriate measures in the isoglucose sector. For that reason the Council takes the view thai it cannot be claimed that it has failed in us duiv to comply with the ludgment of the Court within the meaning of Article 176 of the EEC Treaty. In the Council's view, the obligations resulting Irom a ludgment that a measure is void are to be construed in coniunction 'uh lhe ground upon 'hicn ine nulhiv was pronounced In ine present case the Council's auw *i\. m the actual terms ot the luücmeni declaring Regulation No 1293/7* \oid. to observe the Parliament's right in be consulted in the mauer The lauer. b\us resolution of 9 February 1981, gave a favourable opinion on the Commission's proposal of 20 December 1980. The fact that that opinion was given on the day before the adoption by the Council of Regulations Nos 387 and 388/81 of 10 February 1981 is not, as the applicant asserts, of such a nature as to call in question the validity of that consultation. In fact, the rapid means of communication existing between Community institutions enabled the Council to take full account of the Parliament's opinion particularly since that opinion did not seek to amend the existing draft of the regulation. The Council therefore did not fail to comply with its duty under Article 176 of the EEC Treaty and cannot be accused of having frustrated a legitimate expectation which was entirely nonexistent since those concerned, who as prudent traders were fully informed of the Community's action in the isoglucose sector, had been warned both in law and in fact of the unequivocal intention of the institutions to pursue their polio' of regulating the sector in question. In particular, the attitude of the legislature had been made abundantly clear by the publication on 22 December 198C (Official Journal C 334, p. 2) of the Commission's proposal drawing the consequences of the judgment declaring Regulation No 1293/79 void, whereby the Commission declared itself to be in favour of the adoption with retroactive effect, of ine measures adopted by the Council in the form of Regulations Nos 387 and 388/81. For all those reasons the Council considers ihat it has not defied the authoriix of the Court or the powers of tne Parliament In thai connection the Council seeks to emphasize the exceptional circumstances in which Regulation No 1293/79 was adopted. Owing to the urgency brought about as much by the necessity to comply with the judgment of the Court declaring Regulation No 1111/77 to be void as by the factual situation thus brought about which meant that sugar producers were subjected to a system of levies whilst isoglucose producers thus were exempted from such a system, the Council was compelled, having regard to the delay, which was also exceptional, occasioned by the Parliament in giving its opinion, to adopt Regulation No 1293/79 in the absence of that opinion. The Council, however, observes that its dignity as the Community legislature, its desire to respect the Treaties and also the Commission's power, as guardian of those Treaties, to ensure compliance with the law are all of such a nature as to ensure the proper functioning of the legislative machinery of the Communities. The Council adds, moreover, that the circumstances in which Regulations Nos 387 and 388/81 were adopted and the procedure initiated for the adoption of proposals required to supersede those regulations bear witness to the Council's respect for Parliament's right to be consulted. (b) Secondly, the Council seeks to demonstrate thai there is a general overriding interest, of such a nature as to take precedence over the pecuniary interesu ot the applicants, lusuŕving a retroactive confirmation of the charging of levies laid down bv Regulations Nos 1293/79 and 1592/80 If the retroactive effect of the regulations in question were to be adiudged unlawful the Council argues that not only would the legalnv ot the levies already charged be nullified but that illegality would affect the whole system of regulating the production of isoglucose. Such a solution would have the effect of requiring the Community to reimburse the levies charged which would result in affording isoglucose producers an unexpected and undue financial advantage which would discriminate against competing sugar producers and would enable isoglucose producers unilaterally to strengthen their competitive position. The result would be in the end contrary to the requirements of the common agricultural policy and in particular to Article 39 of the Treaty which, as the Court has emphasized, imposes limits on the freedom of action of institutions with regard to restrictive measures concerning the sugar industry. (c) Lastly, the Council seeks to refute the argument that the fiscal or parafiscal nature of the isoglucose production levy militates against the giving of retroactive effect to the contested provisions. The Council states that, although the levy in question may be equated to a charge, that charge pursues no fiscal objective in the sense that it was not created for the purpose of guaranteeing revenue for the Community but to restrict, in the general interest, the development of isoglucose production. In that connection the Council points out that the revenue from the levy in question is not uniform but depends upon the relationship of the value on the world market of sugar to its value within the Community. In order to finance losses incurred in the exporting of sugar (export refunds) arising from surplus production in the Community of sugar or of isoglucose, the levy is charged only if the production quotas are exceeded owing to the activity of the manufacturers. For that reason the fact that production was indeed restricted during the marketing years 1979 and 1980 owing to the application of Regulations Nos 1293/79 and 1592/80 until October 1980 is immaterial. In fact a reimbursement of the levy, apan from the fact that it would unilaterally alter the competitive situation of isoglucose producers, would have the effect of destroying the system whereby production of isoglucose was restricted in the marketing years 1979 and 1980.

3. The Commission of the European Communities, intervening in support of the Council's conclusions, points out that: (a) the case-law of the Court and the laws of the Member Sutes admit of true exceptions to the principle that legislation should not be retroactive; and (b) the conditions, to which the case-law of the Court makes the retroactive effect of Community provisions subject, were satisfied in the present case. (a) The case-law of the Court (in particular Joined Cases 42 and 49/59 SS'UPAT v High Authority [1961] ECR 53 by no means rules out the retroactive effen of Communitv provisions imposing charges on individuals. That possibility is. moreover, necessary in a legal system which is called upon to reconcile the general interesi with private interests when regulations principally governing economic relationships are implemented. In the Commission's opinion it is wrong to take the view that the Court only sought, in its case-law, to refer to “limited” retroactive erteci and not to “true” retroactivity. In particular the opinion of Mr Advocate General Reischl in the Racke case emphasized that the Court in that case had to adjudicate upon a case of “true” retroactivity. At paragraph 20 of its decision in that case the Court clearly confirmed the legality of retroactivity under Community law and defined its limits. Similarly, the Commission states that it cannot subscribe to the applicant's view that the prohibition of imposing charges on citizens with retroactive effect is “unanimously” embodied in the laws of Member States. The Commission refers on that point to the study of comparative law undertaken by Mr Advocate General Warner in his opinion in the IRCA case mentioned above. That study shows that: Except with regard to criminal liability there is no provision in the constitution of any Member State limiting the extent to which legislation may be retroactive; The only limit to the retroactivity of legislation results from the interpretation by the Bundesverfassungsgericht of the German constitution that a statute may not operate retroactively so as to defeat legitimate expectation; (in that respect the Commission recalls that the Court of Justice laid down a similar limit to retroactivity in Case 98/78 mentioned above), In all the Member States the legislature may enact retroactive laws but there is a presumption against its doing so; Subordinate legislation may have retroactive effect in so far as there is an express or implied enabling statute authorizing it. The Commission concludes therefore that the applicant's analysis of decisions by national courts is inaccurate in particular with regard to German and French cases. (b) The Commission considers that the Council's legislative activity has not in the present case disregarded the conditions imposed by the Court on the retroactivity of Community measures. (i) First, there was no interference with the legitimate expectation of the parties concerned since they cannot satisfactorily show the existence of an established right or a legiumate expectation of reimbursement of the levies paid or that the retroactive measure in question was unforeseeable. With regard to the established right claimed to the reimbursement of the levies in question as a consequence of the annulment of Regulation No 1293/79 the Commission points out that the judgments of the Court of 29 October 1980 could not have the effect of conferring such a right since the declaration that it was void was merely due to the finding of a formal irregularity and not a substantive defect. The applicant is thus confusine two quite distinct causes ot action available in applications based on illegahtv. namelv external legalnv and internal legality The cause of anion relating io internal legalitv was definitively adiudicated upon bv the Court hen it eiamined the substantive allegations made in Cases 138 and 139/79 The declaration bv the Court thai Regulation No 1293/79 was invalid in law cannot therefore be equated to a declaration that the contested measure was void ab initio. Following the consistent case-law of the Court, as illustrated by the judgment in Case 101/78 Granaria [1979] ECR 623, that measure was effective until the date of the judgment declaring it void. In those circumstances the legitimate expectation of the manufacturers could not have been frustrated. As a result isoglucose producers could only rely on established rights to a possible reimbursement if the internal legality of the measure had been called in question by the judgment of the Court. For the same reason producers may not derive from the declaration that Regulation No 1293/79 was void a legitimate expectation to the reimbursement of the levy paid. In any event, even if that expectation did not exist the consistent approach of the Community institutions invalidated any such hope and was sufficient to deprive it of any legal significance. The maintenance with retroactive effect to 1 July 1979 of the disputed levy was moreover perfectly foreseeable for well-informed manufacturers such as the applicants, in view of the grounds upon which the decision of the Court in Cases 138 and 139/79 was based. In fact, in those judgments, the Court unequivocally rejected all the substantive allegations and referred, somewhat unusually, according to the Commission, to the possibility that the Council might take any “appropriate measures” to regulate the production of isoglucose. The Commission observes that the legal significance ot' the judgments of 29 October 1983 was confined, according to the very terms of the declaration of nullity, to the fact that the Council had a dutv formally to consult the Parliament before adopting measures which wereotherwise in conformity with Community law. On the other hand, the question whether or not the provisions concerning isoglucose should be given retroactive effect fell, in the Commission's view, within the scope of the appraisal of the general interest made by the Council subject to review by the Court. Thus regard being had to the fact that, contrary to the first decision of the Court concerning Regulation No 1111/77, neither the principle nor the methods of determining the levy were condemned by the Court, the reference made by the Court to the possibility that the Council might adopt “all appropriate measures” might in the Commission's view, be interpreted as meaning that the measures contained in the regulation, which had been declared void on grounds of external illegality, might be reinstated with retroactive effect. (ii) Secondly, the Commission considers that an overriding general interest justified the giving of retroactive effect to Regulation No 387/81. In fact it is, in the Commission's view, undisputed (cf. paragraph 3D of the judgment in Cases 138 and 139/79) that the restrictive measures imposed on the production of isoglucose contribute to stabilizing the market in sweeteners within the Communitv in order to ensure a fair standard of living tor producers in accordance with the obiecuves of Amele 39 of the Treaty. It is aiso not disputed that that obiective oí general interest, given the close link by means ol which liquid sugar and isoelucose ma\be vubstituted tor each otner. mav be achieved onlv b\the comoination of provisions relating to supar and tnose governine isoglucosc For that reason it is not possible to declare void Jf mum the provisions relating to isoglucose without damaging the hole machinen designed to stabilize the sugar market uithin the Community Moreover, the reimbursement of the levies already paid under Regulation No 1293/79 would have the effect of breaching the principle of equal treatment as between isoglucose producers and sugar producers and, in the end, would threaten the stability of the market. First, such reimbursement would confer a financial benefit on isoglucose producers which sugar producers would not receive. That would be all the more unfair since, following the preliminary rulings of 25 October 1978, they have already benefited from a “considerable advantage” by not being made subject to the first levy provided for by Regulation No 1111/77. That would result in a strengthening of the productive capacity of those producers which already poses a threat to the stability of the market. That state of affairs would be continued if, in addition, the levies already paid were reimbursed to isoglucose producers. The effect of reimbursement would thus be that the responsibility for the financing of the intervention machinery for the expon of sweeteners (refunds, indirect price guarantees and the like) would fall solely upon the sugar producers whereas both categories of manufacturers (sugar producers and isoglucose producers) have benefited from the operation of the machinen Secondly, the Commission points out tnat tne abolition ar initio of the lev), apart torm the tact that it would bring about an uniusutied enrichment of a categorv ol producers thus permitting tnem to increase their productive capacity and would tree them from all financial responvibilitv tor the disposal of the surplus stemming from the increase in their productive capacity and would thuv senouslv threaten the proper tunctioninc o! the sugar markets. The Commission thus considers that the Council was justified in taking the view that an overriding public interest required, by itself, that retroactive effect be given to the provisions in question. In that connection it cannot be said that such retroactivity robs the procedure for consultation with the Parliament of its raison d'etre. Indeed it cannot be disputed in the present case that the Parliament, properly consulted, gave its opinion in full awareness of the retroactive effect conferred by the Council on the measure which it was proposed to adopt. The terms of its resolution of 9 February 1981 (Official Journal No 50, p. 14) are unequivocal on that point. The Parliament was thus able fully to exercise its powers since it was aware of the totality of the provisions submitted for its examination and since by its opinion it approved those measures. If that were not the case and on the supposition that the Council insisted on adopting a regulation in breach of its duty of consultation and that the Commission, “heedless both of its role as guardian of the Treaties and of the risk of censure by the Parliament”, allowed the Council to persist in its stance, the Commission points out that it would remain open to the applicants to bring a second action before the Court in order to preserve their rights.

Second submmion as to a breach of the obligation to state the reasons upon which a measure is based.

1. The applicant states that Regulation No ife/781 confines itself, as regards the statement of its reasons, merely to recalling that the Court found the scheme to restrict isoglucose production to be substantively in conformity with Community law. The applicant considers that such a statement of reasons may on the most favourable view suffice to explain why the Council intended to reintroduce a system of production quotas for isoglucose. However, the applicant is inclined to think that the statement of reasons is incorrect since the Court, in the context of an action for nullity, was not required to pronounce on the conformity with Community law of the machinery established by the Council by its Regulation No 1293/79. In that context, in fact, the Court merely rejected the applicants' substantive allegations which in no way prejudges the conformity of the provisions in question with the law. The applicant, moreover, observes that the statement of reasons, supposing that it may be considered sufficiently explicit, can in no way justify the need for retroactive effect conferred on that regulation and adds that that omission is all the more serious since the retroactive effect “is the essential feature in the scope” of that provision. The applicant acknowledges that the case-law of the Court does not demand “specific reasons to be given for all the details which may be covered by a regulation”; it considers nevertheless that the absence of any statement of reasons on the essential feature of the measure is sufficient to lead to the nullity of that measure. Finally, the applicant denies that the Council is entitled to maintain that Regulation No 387/81 is lawful on the ground that the Court declared Regulation No 1293/79 void merely for infringement of a formal requirement and not on substantive grounds. In that respect, it states that that line of argument contradicts the Council's statement that the conferring of retroactivity on Regulation No 1293/79 would have been legally conceivable although Regulation No 1111/77 was declared invalid by the Court on substantive grounds.

2. The defendant, the Council of the European Communities, considers for its pan that those allegations are unfounded. The Court has repeatedly held that, when a regulation forms pan of a set of regulations, the reasons given for that regulation may be found in the statement of reasons given for earlier regulations, in the present case, the Council considers that the reasons for its action are clearly set out in the statement of reasons contained in Regulation No 1111/77 and detailed in that of Regulation No 1293/79. As regards the absence of reasons for the necessity of the retroactive effect given to Regulation No 387/81 the Council considers that that necessity is clearly explained by the wording of the last sentence of the second recital which is as follows: The Council therefore considers that a “reasonably attentive reader” and in that respect it asserts that the applicant is “much more than” a “reasonably attentive” reader having taken pan “in the previous isoglucose battles” was easilv able to understand the reasons for the Council's action and its decision to give retroactive effect to tne regulation.

“the Court affirmed that the ... regulation was substantively in conformity with Community law; ... it is therefore appropriate to reinstate ... the system of quotas concerned retroactively”.

3. The Commission ol the European Communities considers that the cium relating to a breach of the duty to pive the reasons on which a measure is eased “does not stand up to a simple reading of the recitals oi Regulation No 387/81 ” and states that it ennrelv supports tne Council's arguments retuiing that allegation

Third argument staling to infringement of Article 22: oj the EEC Treaty jnj Amcie 2 oj Council Deemon of 21 April 1988 on the repkeement of financial contributions from Member States by the Communities' own resources

1. In its reply the applicant makes a further submission relating to the Council's lack of competence to create new own resources. (a) As to the admissibility of that submission the applicant states that the Court has on several occasions acknowledged that submissions founded on public policy may be made before the Court at any time. It relies in particular on Cases 1/54 France v High Authority [1954 to 1956] ECR 1. 2/34 hah v High Authority [1954 to 1956] ECR 37, 6/34 hiether'iands v High Authority [1954 to 195Ó] ECR 103, 18/57 /. Nold KG v High Authority [1957 and 1958] ECR 121. In the present case, it maintains that this submission “since it is based on lack of competence and breach of the Treaty” must be considered to be a submission founded on public policy and judged admissible. (b) As to the substance of the submission, the applicant maintains that the isoglucose production levy constitutes revenue accruing to the Community budget, which was not provided tor by the law, at the time when the decision of 21 April 1970 was adopted and which the Council did not have the power to create. In fac:. Article 2 of the decision of 21 April 197; distinguishes between: On the one hand, “levies, premiums ... and aiso contrioutions and other dunes provided for within tne framework ot the organuation oí the markets in sugar, thereinafter called ‘agricultural levies’)”; On the other hand. “Revenue accruing trom otner charges introduced within tne trame'ork o! a common poiicv ... subiect to the procedure laid down in Article 2d of the Treaty ... having been folio'ed” (last paragraph of Article 2 of tne decision o! 21 April 1970. The applicant observes that the isoglucose production levy was brought into being only in 1977 by Regulation No 1111/77. The levy in question cannot therefore be regarded as being “provided for within the framework of the organization of the markets in sugar” within the meaning of Article 2 of the decision of 21 April 1970 since that decision, according to the applicant, intended only to refer to the duties and levies introduced by Regulation No 1009/67 of the Council of 18 December 1967 (Official Journal, English Special Edition 1967, p. 304) without conferring on the Council a power subsequently to create new resources. Moreover, it is clear from paragraph 54 of the judgment of the Court in Joined Cases 103 and 145/77 Royal Scholten-Honig (Holdings) Ltd v Intervention Board for Agricultural Produce; Tunnel Refineries Ltd v Intervention Board for Agricultural Produce [1978] ECR 2037 that by Article 1 of Regulation No 1111/77, the Council “removed isoglucose from the common organization of the market in sugar”. For those reasons, the applicant considers that the levy in question was wrongly equated by the Council, in the ninth recital in the preamble to Regulation No 1111/77, to own resources within the meaning of Article 2 of the decision of 21 April 1970. By virtue of the last paragraph of Article 2 of that provision the levy in question ought to be created under the conditions provided for in Article 201 of the Treat) which provides that the Council may only recommend to the Member States the adoption of new own resources in accordance with their respective constitutional requirements. For that reason the applicant maintains that the Council, by imposing the production levy on isoglucose, acted in breach of Article 201 of the Treatv and in disregard of Article 2 of the decision of 21 April 197C The levy must therefore be considered illegal, leading therefore to the nullity of Regulation No 387/81 creating it.

2. In its rejoinder, the Council of the European Communities considers the fresh issue raised by the applicant to be inadmissible and unfounded. (a) The Council bases its opinion as to its inadmissibility on Article 42 (2) of the Rules of Procedure which, subject to an exception which is not relevant to the present case, formally bars the raising of fresh issues during the course of the proceedings. The Council considers that the distinction between submissions based on public policy and other submissions on which the applicant relies to justify the admissibility of its action finds no support in the letter of Article 42 (2) of the Rules of Procedure and has never been applied or recognized by the Court. The Court did acknowledge, in particular in its judgments in Cases 2/54 Italy v High Authority [1954 to 1956] ECR 37 and 19/58 Federal Republic of Germany v High Authority [1960] ECR 225 that new arguments may be set out in a reply in support of submissions first set out in the application. On the other hand, the Court in its judgment in Joined Cases 19 and 21/60 and 2 and 3/61 Fives Lille Cail v High Authority [1961] ECR 281 clearly decided against admitting the introduction during the course of the proceedings of fresh issues not contained in the application. The Council recognizes that Article 92 of the Rules of Procedure enables the Court as any time to consider objections of inadmissibility where those are based on public policy. But it takes the viewthat that exception should not be regarded as a specific illustration of an implied general rule or as being capable of extension to substantive submissions whether based on public policy or not. In that respect it states that any other interpretation would result in nullifvingthe effect of the prohibition contained in the first sentence of Article 42 (2) of the Rules of Procedure which is to ensure the proper course of the procedure. In the present case, that result would be all the more serious since almost all the submissions relating to the proceedings for a declaration of nullity brought under Article 173 of the EEC Treaty may be described as being based on public policy inasmuch as they refer to concepts such as lack of competence, infringement of essential procedural requirements or infringement of the Treaty, misuse of powers and so forth. To admit new submissions on that basis would thus lead to a multiplication of procedural steps and would prolong indefinitely the hearings of the Court. For those reasons, the Council considers the introduction of this fresh issue to be inadmissible. (b) In the alternative, the Council considers this submission to be unfounded. In support of that claim it puts forward the following arguments: In the line of decisions which it has given on the lawfulness of the system established in respect of the production of isogiucose the Court has acknowledged that the Council had the power to lav down measures restricting production. Therefore the point in issue raised bv the applicant may be reduced to the question of the proper allocation, either to the Community budget or to the budgets of the Member States, of ihe revenue arising from that levy in which the applicant can have no legal interest since in either event it remains iiabic to thai charge. The Council then observes that the submission raised does not concern the case before the Court inasmuch as the allocation of the levy in question as own resources results from Article 4 of Council Regulation No 1110/77 of 17 May 1977 (Official Journal L 134, p. 1) amending the third subparagraph of Article 27 (2) of Regulation No 333C/74 of the Council of 19 December 1974 (Official Journal L 359, p. 1) (earlier regulation establishing a common organization of the market in sugar). Furthermore, the Council emphasizes that the budgetary allocation in favour of the Community was sanctioned by the adoption of the Community budget. It observes that the applicant is not disputing that or other allied legal measures, and that the action is brought onlv against Regulation No 387/81 in so far as it amended Regulation No 1111/77. Finally, the Council rejects the argument that the levy in question constitutes a new charge excluded from the scope of application of Article 2 (a) of the decision of 21 April 1970. In fact, in the Council's view, the isoglucose levycorresponds to the letter to that provision inasmuch as the expression “contributions ... provided for within the framework of the organization of the markets in sugar” does not necessarily implv thai the lew is imposed only on sugar but on anv product on which the charge is an essential element in the organization of the supar market. That is undeniablv so in the present case as Mr Advocate General Reischl stated in his opinion in Case 125/77 Koninklijke Scholtrn-Honil NV Hnofdproduktscbap too' Akkrwou^prnjuktrn [1978] ECR 1991 in f ot ihr tact ihat isogiucose is i prrtrct sustituir 1er *upar In tnat re*prit tur C ouncil wishes to stres* that tne wtem established for isogiucovr hx Recusation No 1110/77 and in îuice^or* nj no “real value on its own” bui may be explained only in the light of the organization of the market in sugar to which it still remains attached by ties resulting from its similarity with sugar and as a result of the direct competition resulting from it. The Council considers therefore that the isoglucose levy does constitute a charge “within the framework of the organization of the markets in sugar” within the meaning of Article 2 (a) of the decision of 21 April 1970. The Council further claims that the applicants are putting an erroneous construction on Article 2 of the decision of 21 April 1970 if they understand a measure as representing the approval given by national legislatures to the transfer of existing levies in the sugar sector on 21 April 1970 but not the transfer of levies “to be established” in the future. The Council on the other hand construes that provision as being an approval of the principle of the transfer to the Community budget of the revenue from levies governing sweeteners. The fact that technological advances have since 1970 enabled a new product to be placed on the market in the same sector cannot be regarded as affecting the principle of the transfer to the Community budget of revenue arising from levies imposed on sweeteners. In the Council's view, any other interpretation would have the effect oí restricting the concept — and the product — of the Community's own resources whenever the appearance of a new product in substitution for or in competition with the products existing in April 1970 would require either that the revenue thus created snould accrue to national budgets or that tne Member States amend the oecision of 21 April 1970 following the procedure laid down in Amcir 23 I or tne EEC Trean For those reasons, the Council considers that the fresh suomission put forward by the applicant is. in anv event, unfounded.

3. The Commission, for its part, considers that the fresh submission is neither admissible nor well-founded. (a) The Commission supports the Council's conclusions as to the inadmissibility of the submission in the light of Article 42 (2) of the Rules of Procedure. The Commission states that, in its view, the concept of “submissions based on public policy” is founded on the idea that the degree of illegality invoked is of so serious a nature that it falls outside the normal rules of procedure. In such circumstances, an issue of that kind may be raised by the Court of its own motion to ensure respect for the law. The Commission observes that the Court's attention was drawn by Mr Advocate General Reischl in his opinion on Case 125/77 Koninklijke Scholen-Homg NV\Hoofdproduktschap voor Akkerbouwprodukten, mentioned above, to the submission now put forward by the applicants and that the Court did not at that time see fit to consider that submission. It is therefore open to doubt, in the Commission's view, whether the submission relied upon may truly be described as being based on public policy, which is one further reason for declaring it inadmissible. (b) As to the substance, the Commission claims that the “strictly literal” construction placed by the applicant on Article 2 of the decision of 21 April 197C fails to do lustice to the dynamic nature ot the system of transferring own resources to the Community. On the contrary, it is clear from the wording of those provisions that the Council did not seek to “freeze” the Community's own resources in the state in which they were on 21 April 197C. In that respect the choice of the expressions “established or to be established”, “contributions and other duties provided for” and “provided for” instead of “established” made by the legislature in drafting Article 2 (a) of the decision clearly demonstrates its intention of providing for the possibility of creating new revenue analogous to the existing revenue on condition that any such new charges in fact constitute measures of economic policy which are needed to attain the objectives of the common policy in question. In the present case the analogous nature of the isoglucose levy cannot be denied since it has a direct connection with measures relating to the sugar sector. That connection stems in the first place from the wording of Regulation No 1111/77 which expressly refers to Regulation No 3330/74 establishing a common organization of the market in sugar. Above all, that connection is highlighted by the interchangeabiliry existing as between liquid sugar and isoglucose (as the Court found at paragraphs 62 and 86 of its judgment in Joined Cases 103 and 145/77 Royal Scholten-Honig Holdings Ltd v Intervention Board for Agricultural Produce) and bv the attribution of that revenue io the financing of export refunds for surpluses of sugar production in the Community. For those reasons, the Commission concludes that the levy comes within the category of own resources lawfully created and that therefore the Council is not in breach of Article 201 of the Treaty. It adds, in the alternative, that the question of budgetary allocation of that charge does not call for consideration in the context of the present proceedings since the applicant has no sufficient legal interest in that question.

IV — Oral procedure

At the sitting on 1 July 1982 G. R. Amylum NV, represented by M. Waelbroeck of the Brussels Bar, the Council of the European Communities, represented by D. Vignes, Director of its Legal Department, assisted by A. Bräutigam, Administrator in that department, and the Commission of the European Communities, represented by R. ^ŕ'ainwright, Legal Adviser, assisted by F. Lamoureux, a member of its Legal Department, presented their observations and oral argument.

The Advocate General delivered his opinion at the silting on 23 September 1982.

Decision

1. By application lodged at the Court Registrv on 4 May 1981 G. R. Amylum NY. a limned company incorporated under Belgian law, brought an action beîore the Court under the second paragrapn of Article 173 of the EEC Treaty for a declaration that Council Regulation (EEC) No 387/81 of 12 February 1981 (Official Journal 1981 L 44. p. 1) amending Council Regulation (EEC) No 1111/77 of 17 May 1977 laving down common provisions tor isoglucose (Official Journal 1977 L 134. p 41 is void inasmuch as Article 1 (3) and (4) of that regulation reinstates, in respect of the same period, that is to say with retroactive effect, the system of quotas laid down by Regulation No 1293/79 in respect of the period running from 1 July 1979 to 30 June 1980.

2. Council Regulation No 1293/79 of 25 June 1979, which amended the aforementioned Regulation No 1111/77 in particular by inserting in it a new Article 9, was in fact declared void by judgments of the Court of 29 October 1980 in Case 138/79 Roquette Frères SA v Council of the European Communities [1980] ECR 3333 and in Case 139/79 Maizena GmbH v Council of the European Communities [1980] ECR 3393 because it was adopted in the absence of the opinion of the Parliament, required by Article 43 of the Treaty.

3. In support of its action the applicant claims in its application first that the contested regulation offends against the principle that Community measures should not have retroactive effect and secondly that the statement of the reasons upon which the measure was based is insufficient. In its reply the applicant makes a further submission based on the Council's lack of competence to create an isoglucose production levy.

I — First submission: Breach of the principle that Community measures may not have retroactive effect

4. As the Court has alreadv held, in particular in its judgments of 25 January 1979 in Case 98/78 Racke [1979] ECR 69 and Case 99/78 Decker [1979]. ECR 101, although in general the principle of legal certainty, as the applicant states, precludes a Community measure from taking effect from a point in time before :ts publication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected.

5. As regards the first of those two conditions it is well to call to mind certain matters of fact or law which are moreover well known to the parties. During the period of application ot the contested regulation sugar producers were, in particular, subiect to quotas and production levies. Isoglucose is a product which may be substituted for sugar and is in direct competition with it. Any Community decision concerning one of those products necessarily has repercussions on the other. Having regard to that situation, although by judgments of 29 October 1980 the Court declared Regulation No 1293/79 void for infringement of an essential procedural requirement, namely the absence of the Parliament's opinion, the Court nevertheless considered that it was a matter for the Council, in view of the fact that isoglucose production was contributing to an increase in sugar surpluses and that it was open to it to impose restrictive measures on that production, to take such measures in the context of the agricultural policy as it judged to be useful, regard being had to the similarity and interdependence of the two markets and the specific nature of the isoglucose market.

6. If, following the declaration of the nullity of Regulation No 1293/79, the Council had adopted no measure restrictive of isoglucose production — in the present case the reinstatement with effect from 1 July 1979 of the quotas allocated and the levies imposed on the producers — the objective which it was pursuing, namely the stabilization, in the general interest, of the sugar market, could not have been achieved or could only have been achieved to the detriment of sugar producers, who alone would have had to finance the costs of Community surpluses, or even to the detriment of the Community as a whole, whilst isoglucose producers whose production competed with that of sugar undertakings would have escaped all restraints.

7. The Court is unable to uphold the argument put forward by the applicant that the application of Regulation No 1293/79, until it was declared void by the Court, had held isoglucose producers to observe the quotas which it laid down and thus rendered superfluous their reinstatement by the contested regulation. In fact, in addition to the legal basis which the contested regulation gave to the system of quotas during the period in question from 1 July 1979 to 30 June 1980, the maintenance of levies during that period, which was necessary to attain the objectives of public interest pursued by the Council, mnde it necessary to fix the quotas upon which the amount of those levies depended

8. Thus the Council was lawfully entitled to consider that the objective to be achieved in the general interest, namely the stabilization of the Community market in sweeteners without arbitrary discrimination between traders, required the contested provisions to be retroactive in nature and thus the first of the conditions which the Court lays down for the applicability rattorte tempons of a Community measure to a date prior to the date of its publication may be regarded as satisfied.

9. To ascertain whether the second of the conditions set out above is satisfied it is necessary to inquire whether the action of the Council in publishing on 17 February 1981 Regulation No 387/81 has frustrated a legitimate expectation on the part of the applicants to the effect that the production of isoglucose would not be regulated during the period from 1 July 1979 to 30 June 1980, the period to which that regulation makes applicable Article 9 relating to quotas and production levies on isoglucose which it inserted in Regulation No 1111/77.

10. It should first be pointed out that the contested provisions of Regulation No 387/81 do not include any new measures and merely reproduce the provisions of Council Regulation No 1293/79 declared void by the Court on 29 October 1980.

11. In view of the fact that Council Regulation No 1293/79 of 25 June 1979 retained its full effect within the Community legal order until it was declared void, so that the national authorities responsible for its implementation were required to subject the production of isoglucose to the restrictive system which it laid down, such a legitimate expectation could only be founded on the unforeseeabihty of the reinstatement with retroactive effect of the measures contained in Regulation No 1293/79 declared void by the Court.

12. In the present case the applicant cannot claim any legitimate expectation worthy of protection.

13. In the first place the traders concerned by the rules in question are limited in number and are reasonably well aware of the interdependence of the markets in liquid sugar and isoglucose, of the situation of the Community market in sweeteners and therefore of the consequences which, following thedeclaration that Regulation No 1293/79 was void, the imposition on the production of sugar in respect of the period from 1 July 1979 to 30 June 1980 of stabilization measures from which the production of isoglucose would have been entirely exempt might have had.

14. Secondly by adopting successively Regulations Kos 1111/77, 1293/79 and 1592/8G, the latter regulation extending the effects of the previous one in respect of the period from 1 July 1980 to 30 June 1981 the Council had clearly manifested its intention of regulating the production of all sweeteners in the Community and to that end of subjecting the production of isoglucose to a restrictive system based on a system of quotas and production levies.

15. Thirdly it could not have escaped the notice of the applicant that in both judgments of the Court of 29 October 1980 which declared void Regulation No 1293/79 (which also fixed its own production quota), the Court rejected the grounds on which the applicant companies Roquette and Maizena were contesting the substantive validity of that regulation and was at pains, at the same time as pronouncing it void for failure to obtain the Parliaments opinion, to state that such nullity was without prejudice to “the Council's power following the present judgment to take all appropriate measures pursuant to the first paragraph of Article 176 of the Treaty”.

16. Finally, from the publication of the Commission's proposal in the Official Journal of 2Z December 19SC (C 334. p. 2i the applicant knew that the Commission had. as earlv as 3 December 19SC. submitted to the Council a proposal tor a regulation amending, in particular. Regulation No 1111/77. in order to reinstate, for the period from 1 july 1979 to 30 June 1988. the svsiem of Quotas and levies in the torm ir. anich that svstcm had been laid down bv Regulation No 1293/'79 and in which it was to be reinstated bv the contested provisions ot Regulation No 3$7/'Sl

17. In challenging the retroacuwi\ of those provisions the applicant turther claims that they disturb tne institutional equilibrium of tne Communities. Tnat claim cannot be upheld On the one hand, tnere is no provision or the Treaty which precluded the Párnámén, irom ücip.i; caiieo upon to express us views on a retroactive reinstatement of Regulation No 1293/79 although it had not given its opinion on that regulation. On the other hand, the fact that the Court, in declaring that regulation void, did not think fit to make use of the power given to it by the second paragraph of Article 174 to state which of the effects of the regulation which it had declared void should be considered definitive, gives no ground for regarding the retroactive effect given to the contested provisions of Regulation No 387/81, adopted by the Council in the context of the first paragraph of Article 176 of the Treaty, as a trespass on the prerogatives of the Court.

II — Second submission: Breach of the duty to state the reasons upon which a measure is based

18. The applicant claims that the Council has given inadequate reasons for the retroactive effect given to Regulation No 387/81 and therefore has infringed the provisions of Article 190 of the Treaty.

19. According to the case-low of the Court the statement of the reasons on which a measure is based, which is required by Article 190 of the Treaty, must be adapted to the nature of the measure in question. It must enable the reasoning of the Community institution responsible for the measure to emerge clearly and unequivocally so as to enable those concerned to recognize the reasons for the measure adopted and the Court to exercise its power of review.

20. The statement of the reasons on which Council Regulation No 387/81 is based states first ihat “Council Regulation (EEC) No 1111/77 of 17 May 1977 laying down common provisions for isoglucose, in the version established bv Regulation (EEC) No 1293/79, provided for the application ot a svsiem of production quotas for the period from 1 July 1979 to 30 June 1980 and. secondly that ”in Cases 138/79 and 139/79 the Court of Justice of the European Communities, on 29 October 1980, annulled Regulation (EEC) No 1293/79, which amended Regulation (EEC) No 1111/77, on the grounds of an infringement of an essential procedural requirement; ... in reiecting all the alleged complaints of breach of the principles of the law of competition, of proportionality and of nondiscrimination made against the system of production quotas introduced by Regulation (EEC) No 1293/79, the Court affirmed that the latter regulation was substantively in conformity with Community law; ... it is therefore appropriate to reinstate inter aita the system of quotas concerned retroactively.

21. Laconic as these reasons may be, they satisfy the requirement laid down by Article 190 of the Treaty. In fact, by referring to the system of production quotas, which moreover was well known to those concerned, the provisions of the preamble to the contested regulation set forth in essence the objective pursued by the institution responsible for the contested measure, namely to ensure continuity in time of the system restricting isoglucose production — a svstem in respect of which the Court, in its judgments in Cases 138/79 and 139/79 of 29 October 1980, rejected the substantive criticisms made against it by the applicant undertakings — in order to ensure an equal division of burdens on the production of isoglucose and that of liquid sugar which are in direct competition on the market in sweeteners.

22. The submission as to breach of the requirement to state the reasons on which the measure was based must therefore be rejected as unfounded.

III — Third submission: Infringement of Article 201 of the Treatv and Article 2 of the decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources

23. In its replv the applicant put forward a new submission based on the Council's lack of competence to create by means of Regulation No 3S7/81 a lew on the production of isoglucose. The applicant takes the view that that lew is revenue accruing to the Community budget which was not provided for bv the legislation at the time at which Council Decision 70/243 of 21 April l970 on the replacement of financial contributions from Member States bv tne Communities* own resources was adopted (Official Journal. English Specia! Edition 197; (1). p. 22*). The Council therefore did not have the po^cr to introduce the contested lew but, in pursuance of Article 201 of the Treatv, was able merely to recommend us adoption by the Member States in accordance with their respective constitutional requirements.

24. The defendant and the intervener consider that submission to be inadmissible by virtue of Article 42 (2) of the Rules of Procedure of the Court of Justice which allows no fresh issue to be raised during the course of the procedure unless it is based on matters of law or of fact which have come to light in the course of the written procedure.

25. In the present case, the new submission made by the applicant cannot be regarded as being “based on matters of law or of fact”, which have come to light, “in the course of the written procedure”, since it is based on an alleged illegality which was capable of being known and pleaded as from the moment when Regulation No 387/81 came into existence. Nor, on the other hand, can it be regarded as amplifiying a submission made previously because it is only in the reply that the legal rule alleged to have been infringed is mentioned and the cause of nullity thus invoked was referred to neither directly nor by implication in the application originating the proceedings.

26. The submission made by the applicant therefore raises an entirely fresh issue which is inadmissible since it is out of time under Article 42 (2) of the Rules of Procedure.

27. Although it is true that the applicant also seeks to rely on the provisions of Article 92 (2) of the Rules of Procedure which enables the Court at any time of its own motion to consider whether there exists any absolute bar to proceeding with the case, that provision, concerned as it is only with such absolute bars, does not allow a party to raise a fresh issue which is out of time and breach of the provisions of Article 42 (2) of the Rules of Procedure.

28. However, since the submission relates to the powers of the author of the contested measure, the Court considers that it should state the reasons why the Council was competent to impose a levy on the production of isoglucose.

29. Subject to the procedural conditions which it lays down, Article 43 of the Treatv assigns to the Council the task of creating the common organization of the agricultural markets and laying down the rules relating thereto. By virtue of Article 40 (3) of the Treaty, that common organization in one of the forms provided for by paragraph (2) of that article, which comprises inter alia a market organization, may include all measures required to attain the objectives set out in Article 39, in particular regulation of prîtes, aids for the production and marketing of the various products, storage and carryover arrangements and common machinery for stabilizing imports or exports.

30. Under the first subparagraph of Article 9 (8) of Council Regulation No 1111/77 as supplemented by the contested provisions of Regulation No 387/81, the isoglucose production levy is charged on the producer in respect of the quantity of iscglucose production which exceeds the basic quota without exceeding the maximum quota. Under the second subparagraph the amount of the isoglucose production levy is to be equal to the share of the sugar production levy borne by the sugar manufacturers fixed for the 1979/80 sugar year pursuant to Article 28 of Regulation No 3330/74. That share of the levy itself results from a complex method of calculation which is laid down in Article 27 of the latter regulation and makes sugar producers bear, by way of levies, the losses incurred by the Community as a result of the disposal of the quantity produced which exceeds human consumption in the Community. Thus the isoglucose production levy was established in order to contribute to stabilizing the Community market in sweeteners and, in particular, as the seventh recital in the preamble to Regulation No 1111 /77 indicates, to expon costs.

31. It follows from the foregoing that the isoglucose production levy comes within the terms of Articles 39 and 40 of the Treatv and that the Council was competent to establish it and to lay down detailed rules for its operation pursuant to Article 43 which, moreover, is referred to by the contested Regulation No 387/81.

32. As regards the Council Decision of 21 April 1970 on ihr replacement of financial contributions from Memoer States rn me Communities' own resources, adopted in pursuance of Article 201 ot the Treatv bv the Member States in conformity with the provisions of that article, it should first be stressed that its purpose is to define own resources allocated to the Community budget and not to stipulate the Communits institutions which are competent to impose duties, taxes, charges, levies or other forms of revenue. As a measure adopted under budgetary law, that decision does not prevent the Council from creating a levy such as the one imposed on the production of isoglucose where the power of the Council to create that levy has its basis, as has been said, in the provisions of the Treaty relating to the common agricultural policy.

33. Furthermore, Article 2 (a) of the decision of 21 April 1970 includes in Communities' own resources revenue coming from “contributions and other duties provided for within the framework of the organization of the markets in sugar”. In view of the developments which were inevitably to take place in Community production and marketing of sugar and, consequently, the need to adapt contributions, levies, refunds and price support measures to those developments in the requirements of the Community markets in sugar, it was not conceivable that the scope of application of the decision of 21 April 1970 could have been limited merely to the levies which were provided for when it was adopted, that is to say to the levies laid down at that time by Regulation No 1069/67 of the Council of 18 December 1967 establishing a common organization of the market in sugar (Official Journal, English Special Edition 1967, p. 304). Although isoglucose was only produced in significant amounts in the Community several years after the adoption of the decision of 21 April 1970, the direct competition which it provides for liquid sugar on the market in sweeteners means that it must be included amongst the products which are marketed on the “markets in sugar” within the terms of the decision of 21 April 1970.

34. It follows that the Council was competent to adopt the contested provisions contained in Regulation No 387/81 and that no provision of budgetary law affected that power.

IV — Costs

35. Under the terms of Article 69 of the Rules of Procedure the unsuccessful party is to be ordered to pav the costs if they have been asked for in the successful party's pleading The applicant has failed in all its submissions and must therefore be ordered to pay all the costs including those of the intervener.

On those grounds, THE COURT (Second Chamber) hereby:

1 Dismisses as unfounded the application for a declaration that Council Regulation No 387/81 is void;

2 Orders the applicant to pay the costs including those of the intervener.

1 According to the applicant those tinân are ol rei and decleration laws the owndrawal of integral measures laws concerning panici subject-matter in ör' of rOtrcïto legitimate rriu4.:fit of the parties concerned in no longer “worths of protection” and cases where retroactivity is necessary “for compelling reasons which land over the certains”