C-110/81

JUDGMENT OF 30. 9. 1982 — CASE 110/81 ROQUETTE FRÈRES v COUNCIL

CELEX: 61981CJ0110
Datum: 1982-09-30
Källa: eur-lex.europa.eu

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 panics may be summarized as follows:

I — Facts and written procedure

A — Background lo the dispute

1. By a preliminary ruling of 23 October 1978 given in Joined Cases 103 and 145/77 Royal Scholten- Monig (Holdings) Limited v Intervention Board for Agricultural Produces Funnel Refinences Limited v Intervention Board for Agricultural Produce [1978] ECR 2857 the Court of Justice held that Council Regulation No I 1111/77 of 17 May 1977 laying down common provision for isoglucose was invalid to the extent to which Articles 8 and 9 thereof imposed a production levy on isoglucose of five units of account per 100 kg of dry matter for the period corresponding to the sugar marketing year 1977/78. The Coun stated, in fact, that the system established by the abovementioned provisions offended against the general principle of equality (in that case as between sugar producers and isoglucose producers) The Coun added, however, that the ruling ieit the Council free to take anv necessarv measures compatible with Communitv 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 by tne Commission. Regulation No 1295/79 (Official Journal L 162. p. 10, with corrigendum in Official Journal amending Regulation No 1111/77. That regulation entered into force, pursuant to Article 5 thereof, on 1 July 1979.

3. Regulation No 1293/79 amended Regulation No 1111/77 in the light of the judgment of the Court of Justice of 25 October 1978. In view of the fact that the most appropriate means for avoiding inequality of treatment was to subject 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, after 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 or registered office | Basic quota in tonnes etrressed as drv 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, Alessandna. Casella Postale 1 | 5863

Fabbriche Riunite Amido Glucosio Destnna SpA | Piazza Erculea 9. Milano | 10706

Tunnel Refineries Ltd | Thames Bank House. Greenwich. London SE 10 :PA | 21696”

4. Bv separate judgments of 29 October 1980 delivered in Case 138/79 SA Roquette Frères v Councí/o/lhe European Communities [1980] ECR 3333 and Case I 39/79 Maizena GmbH v Council of the F.uropean Communities [1980] ECR 3393, the Court declared Regulation No 1293/79 to be void for infringement of essential procedural requirements on the ground that the regulation had been adopted on 23 June 1973 in the absence of the Parliament's opinion required by Article 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 ludgment was based, the Court rciected all the substantive arguments adduced against the svstem of production quotas introduced by that regulation and in particular against the basic quotas fixed for the applicants in the rwo 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 Roquriit v Council and 176/80 for Mautnj v Council.

9. On 10 January 1981. that u to six while Cases 17b and I 179/8: were pending before the Court, the Council, atter obtaining the opinion of the European Parliament which m 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 laying down common provisions for isoglucose. By means of a reference to the provisions of Regulation No 1111/77 that regulation reinstates inter alia the system 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 tum 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 us 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 Registy on 7 May 1981 SA Roquette Freres requested the Court to declare void Council Regulations (EEC) Nos 387/81 and 388/81

2. In its defence dated 30 June 1981 the Council maintained that the application was unfounded.

3. The applicant lodged its reply at the Court Registry on 30 July 1981.

4. By an application received at the Court Registry on 29 July 1981 the Commission 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 1 October 1981.

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

7. By an order of 24 March 1982 the Court, having heard the views of the Advocate General, deciaed, pursuant to Article 93 (1) and (2) of the Rules of Procedure, io assign the case to the Second Chamber

II — Conclusions of the parties

1. By an originating application SA Roquette Frères ciaims that the Court should (a) declare this application to be admissible and well founded; (b) consequently, declare void Council Regulations Nos 387/81 and 388/81 of 10 February 1981 and the individual decisions contained therein, at least, in so far as those measures concern the applicant undertaking; (c) order the Council to pay 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 231 of the EEC Treaty.

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

III — Submissions and arguments of the parties

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

1. SA Roquette Frères considers that the principle that legislation may not be retroactive finds recognition in Community lau- in the second paragraph of Article 191 of the EEC Treaty which provides that “Directives and decisions shall take effect upon notification”, which means that measures adopted under Community law may not have effect prior to their notification. In the applicant's view it is immaterial that Regulations Nos 387/81 and 388/81 under challenge are not “decisions” within the meaning of that provision. In fact, by way of the regulations which form the subject-matter of the application, the applicant is contesting the individual decision included in the provisions of a general nature, which subiect it to a system of production quotas and levies. (a) More generally the applicant maintains that “true” retroactivity, namely the application to completed transactions of a system regulating the production of isoglucose, has been condemned by the Cour. In fact it is clear from the judgments in Cases 7/76 IRCA v Amministrazione aelie Finanze dello Stato [1976] ECR 1213. Case 96/77 Bauche v Administration Française des Douanes [1976 ECR 1213 and Case 96/77 Racke v Hauftzoliamt Mainz [1979] ECR 69 that Community law admits of retroactivity only “in exceptional cases where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected” (cf. Racke at paragraph 20). In that connection the applicant bases its argument on the wording of the recitals in the preamble to Regulation No 1293/79 and on the arguments put forward by the Council in Case 138/79, which led to the judgment of the Court of 20 October 1979 declaring Regulation No 1293/79 void, and states that the Council appeared, until the adoption of the contested regulations, to have been “convinced of its obligation not to infringe the principle of the non-retroactivity of legislation”. The applicant assumes therefore that the Council felt obliged to revise its view and maintains that, in the present case, the conferring of retroactive effect on Regulations Nos 387/81 and 388/81 does not satisfy the conditions of lawfulness laid down by the judgment of the Court in the Racke case. The applicant observes that the retroactive application of the quota system is, in its view, entirely “ineffective and useless”. In fact, the applicability of Regulation No 1293/79, until it was declared void by the Court, in any event compelled isoglucose producers to respect the volumes of production imposed bv the Community legislature. Thus, the only practical reason for the retroactivity of the contested regulations is to subiect the applicant to the payment of production levies in respect or periods preceding the 1981 markeung vear Such retroactivitx gi\es those measures a fiscal or parafiscal nature and is therefore specifically contrarv to all general legal principles (b) Moreover the applicant states that the Council, bv giving the contested regulations retroactive effect, failed to fulfil the obligation imposed on u by the first paragraph of Article 176 of the EEC Treaty “to take the necessary measures to comply with the judgment of the Court of Justice”. The applicant interprets that provision as imposing a duty on the authority whose measure has been declared void by the Court, on the one hand to restore matters to the state in which they were, that is to say in the present case, to invite the competent national authorities to abolish charges to production levies, which, following the judgment of the Court, was deprived of any legal foundation and, on the other hand, not retroactively to reinstate the same provisions as those which were declared void, since the Court did not make use of its power under the second paragraph of Article 174 of the EEC Treaty to limit the effect rettone tempons of its deciaraiion of nullity.

2. The Council of the European Communities, the defendant, considers for its part that the case-law of the Court clearlv demonstrates, in particular in its judgment in Case 98/78 Räcke [1979] ECR 69 at paragraph 20 that retroactive Community measures are by no means excluded as a matter of principle. However, the Court has sought to make retroactive Community measures subject to judicial review to ensure that they observe 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 ot the legislation muit br necessary so as to vjustv (he aim pursued bv the legislation in question or to meet a need ot overriding penerai interest. The Council considers that these conditions as drtinrd have been observed in the present case (a) There can be no legitimate expectation on the pan 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 thus only be conceivable if the Coun had condemned that policy in principle. The judgment declaring Regulation No 1111/77 to be void was restricted to condemning the method of calculating the isoglucose production levy and not the principle of the levy. 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 Coun in its ludgmem 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 pnnciple of a levy imposed on the production of isoglucose. The legality of the pnnciple 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. For that reason the applicant's argument cannot be accepted that Article 191 of the EEC Treaty prohibits individual decisions from having retroactive effect. In addition to the fact that the Council disputes that Article 191 may be interpreted in that way, it also observes that the legislative nature of the contested measures is sufficient to remove any alleged prohibition of retroactivity affecting the individual decisions contained in the regulations in question. 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 legislam e 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 reiection 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 view that 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 including as regards 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 facto 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 take all appropriate measures in the isoglucose sector. For that reason the Council takes the view that it cannot be claimed that it has failed in its duty to comply with the judgment of the Court within the meaning of Article 176 of the EEC Treaty. In the Council's view, the obligations resulting from a ludgmeni that a measure is \oid are to be construed in coniunrtion with the ground upon which the nullity was pronounced. In the present case the Council's duty was, in the actual terms of the judgment declaring Regulation No 1293/79 void, to observe the Parliament's right to be consulted in the matter. The latter, by its 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 complv with its dutv 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 policy of regulating the sector in question. In particular, the attitude of the legislature had been made abundantly clear by the publication on 20 December 1980 (Official Journal C 334. p. 21 of the Commission's proposal drafting the consequences of the judgment declaring Regulation No 1293/79 void, whereby tne Commission declared itself to be in tavour of the adoption, with retroactive effect of the measures adopted tu the Commun in form of Regulations Nos 357 and 3881 For all those reasons tnr Council icntidrrs tra: it hav not defied the au'.nonts o' the Court or the ppers of the Pariianrr.: In that connection trie Council re, s to rmpí:as:/r tne 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 that there is a general overriding interest, of such a nature as to take precedence over the pecuniary interests of the applicants, justifying 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 oniv would the legality of the levies alreadv charged be nullified but that illfgalitv would affect the whole system for 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 polio. 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 pursued 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 ol sugar texpon reiundsl arising from surplus production in the Community of sugar or ol isogiucose. the levy is charged only if the production quotas are exceeded owing to the activity of the manufacturers For that reason the fact iha: prouuction as indeed restricted Jurinp the marketing vrarv 1979 and 1982 owing to the application ot Regulations Nos 12V3/79 and 1592/SC until Ottober ivs; is immaterial In tact a reimbursement of the lev\. apart trom the tact that it would unilateralii 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 States 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 49/79 SXUPATv High Authority [1961] ECR 53) by no means rules out the retroactive effect of Community provisions imposing charges on individuals. That possibility is moreover necessary in a legal system which is called upon to reconcile the general interest with private interests when regulations principallv governing economic relationships are implemented. In the Commission's opinion it is wrong to take the view that me Court only sought, in us case-law to reter to “limited” retroactive effect and not to “true” retroactivity. In particular the opinion of Mr Advocate General Reischl in the Räcke case emphasized that the Court in that case nad 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. (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 legitimate 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 nght since the declaration that it was void was merely due to the finding of a formal irregularis and not a substantive defect. The applicant is thus contusing two quite distinct causes of action available in applications based on ihegaluv. namely external legiiits and iniernal legality. The cause ol action relating to internal legalus was definitive iv adiudicated upon by the Court a hen it examined the sub- stantise allegations made in Cases 138 and139/79 The declaration by the Court that 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 Granana [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 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 lew 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 substantis'e 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 of the judgments of 29 October 1980 was confined, according to the vers' terms of the declaration of nullity, to the fact that the Council had a duty formally to consult the Parliament before adopting measures which were otherwise 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 3C 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 Community in order to ensure a fair standard of living tor producers in accordance with the obiectives of Article 39 of the Treaty. It is aiso not disputed that that obiective of general interest, given the close link by means of which liquid sugar and tsoglucosc mav be substituted lor each other. may be achieved onlv bv the combination ol provisions relating to sugar and those governing isoglucose. For that reason u is not possible to declare void ah initio the provisions relating to isoglucose without damaging the whole machinen, designed to stabilize the sugar market within 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 machinen- for the export of sweeteners (refunds, indirect pnce guarantees and the like) would fall solelv 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 that the abolition jp imito ot the lew, apan trom the tact that it would bring about an uniusufied enrichment ot a caiepon ot producers thus permuting them to increase their productive capacitv. would tree them trom all financial responsibilitv tor the disposal of the surplus stemming from the increase in their productive capacitv and would thus seriously threaten the proper functioning of the sugar markets. The Commission thus considers that the Council was justified in taking the viewthat 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 ofcensure 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 presene their rights.

Second submission as to a breach of the obligation to state the reasons upon zt-hich a measure is based

1. The applicant considers that both Regulation* Nos 387/g I and 388/SI tnemseives and the individuai decisions * men ihrv contain lack anv statement ot the reasons tor which the Council considered it was obliged to adopt retroactive measures It states that, pursuant to the Treaty and the case-law of the Court, such a total absence of reasons is sufficient to entail the nullity of such measures.

2. The defendant, the Council of the European Communities, considers for its part that those allegations are unfounded. The Court has repeatedly held that, when a regulation forms part 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 part “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 the 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 of the European Communities considers that the claim relaung to a breach of the duty to give the reasons on which a measure is based “does not sund up to a simple reading of the recitals of Regulation No 387/81” and states that it entirely supports the Council's arguments refuting that allegation.

Third argument rekting to an infringement of Article 201 of the EEC Treaty and Article 2 of Council Decision of 21 April 1970 on the repkcement 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, 2/54 Italy v High Authority [1954 to 1956] ECR 37, 6/54 Netherlands v High Authority [1954 to 1956] ECR 1C3, 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 thai the isoglucose production levyconstitutes revenue accruing to the Community budget, which was not proMOed for by the law at the time when tne decision ot 21 April 1970 was adopted, and which the Council did not have the power to create. In fact, Article 2 of the decision of 21 April 1970 distinguishes between. On the one hand, “levies, premiums and also contributions and other duties provided for within the framework of the organization of the markets in sugar, thereinafter called ‘agricultural levies’)”. On the other hand, “Revenue accruing from other charges introduced within the framework of a common policy ... subject to the procedure laid down in Article 201 of the Treaty ... having been followed” (last paragraph of Article 2 of the decision of 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 1100/77, the Council “removed isoglucose from the common organization of the market in sugar”. For those reasons, the applicant considers that the levv in question was wrongiv equated bv 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 prpvmon :nr lev. in question ought to be created under the conditions provided tor in Article 201 ol the Treaty which provides that tne Council may only recommend io tne Member Slates 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 Treaty and in disregard of Article 2 of the decision of 21 April 1970.

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 replv in support of submissions first set out in the application. On the other hand, the Court in its |udgmeni in Joined Cases 19 and 21/60 and 2 and 3/61 Fivei Lille Cail v High Authority [1961] ECR 281 clearly decided igainst admitting the introduction during the course of the proceedings of fresh issues not contained in the application. The Council recognizes that Anide 92 of the Rules of Procedure enables the Court at any time to consider obiections of inadmissibility where those are based on public policy But it takel, the view that 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 have the result of nullifying the 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 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 as to the lawfulness of the system established in respect of the production of isoglucose the Court has acknowledged that the Council had the power to lay down measures restricting production. Therefore the point in issue raised by 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 the revenue arising from that levy in which the applicant can have no legal interest since in either event it remains liable to that 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 3330/74 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 only 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 supar” does not necessarily imply thai the levy is imposed only on sugar but on any produci on which the charge is an essential element in the organization of the sugar markei That is undeniabiv so in the present case, as Mr Advocate General Reisch! stated in his opinion in Case 123/77 Komnkliikt Scholten-Hontg NV v Hoofdprodukttchap voor Akkerbouwproduktm [1978] ECR 1991 in view of the fact thai isoglucose is a perfect substitute for sugar. In that respect the Council wishes to stress that the system established for isoglucose by Regulation No 1110/77 and its successors has no real value on its own but may be explained only in the light of the organization of the market in sugar to which it still remains attached by the 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 lew 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 to 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 faci that technological advancements have since 1970 enabled a new produci 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 of restricting the concept — and the product — of Community's own resources whenever the appearance of a new product in substitution tor or in competition wuh the products existing in April 1970 would require either thai the revenue ihus created should accrue to national budgets or that the Member States amend the decision of 21 April 1970 following the procedure laid down in Article 201 of the EEC Treaty. For those reasons, the Council considers that the fresh submission put forward by the applicant is, in any 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 sutes 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 maybe 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 Scholten-Honig.Wv Hoofdproduktschap voor Akkerbouwprodukten mentioned above, to the submission now put forward bv 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 poliev, which is one further reason tor declaring u inadmissible (b) As to the substance. the Commission claims that the “strictlv iterai” construction placed by the applicant on Article 2 of the decision of 21 April 1970 fails to do justice to the dynamic nature of the system 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 1970. 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 interchangeability 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 Schoiten-Honig Holdings Ltd v Intervention Board for Agricultural Produce) and by the attribution of that revenue to the financing of expon 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 the 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 public sitting on 1 July 1982 SA Roquette Frères, represented by M. Veroone, of the Lille 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. Wainwright, Legal Adviser, assisted by F. Lamoureux, a member of its Legal Department, presented legal argument and observations.

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

Decision

1. By application lodged at the Court Registry on 7 May 1981 SA Roquette Frères, a limited company incorporated under French law, brought an application before the Court under the second paragraph of Article 173 of the EEC Treaty for a declaration that: 1. Council Regulation No 387/81 of 10 February 1981 (Official Journal L 44, p. 1) amending Council Regulation No 1111/77 of 17 May 1977 laying down common provisions for isoglucose (Official Journal L 134, p. 4); 2. Council Regulation No 388/81 of 10 February 1981 amending Regulation (EEC) No 1392/80 on the application of the system of production quotas in the sugar and isoglucose sectors during the period 1 July 1980 to 3 June 1981 (Official Journal L 44, p. 4) are void.

2. Article 1 (3) and (4) of Regulation No 387/81 reinstates for the same period, that, is to sa\with retroactive effect, the svstem of quotas laid down by Regulation No 12o3'~9 m respect of the period from 1 July 1979 to 30 June 1980. the soie difference being slight increases in quota allocated to Maizena GmbH Council Regulation No 1293/79 oi 23 June 1979, which amended the aforementioned Regulation No 1111/77, m particular by inserting in it a new Article 9. was in fact declared void bv judgments ot the Court of 29 October 1980 in Case 138/79 SA Roquette Frères v Council of the European Communities [1980] ECR 3333 and in Case 139/79 Maizena GmbH w 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. Article 2 of Council Regulation No 1592/80 of 24 June 1980 extended, in respect of the period from 1 July 1980 to 30 June 1981, the system of production quotas for isoglucose, as it had been laid down, inter alia, by Article 9 inserted in Regulation No 1111/77 by Regulation No 1293/79. Following the declaration by the Court that Regulation No 1293/79 was void, the Council, as it stated in the second recital in the preamble to the regulation, in order to avoid any doubts as to the legality of Article 2 of Regulation No 1592/80, referring from then on to Regulation No 387/81, reinstated the provisions of Article 2 by Regulation No 388/81.

4. 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

5. As the Court has alreadv held, in particular in its judgments of 25 January 1979 m 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 staies. precludes a Community measure from taking effect from a point m ume before us publication, u may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected.

6. As regards the first of those two conditions it is well to call to mind certain matters of tact or law which are moreover well known to the parties. During the period of application of the contested regulation sugar producers were, in particular, subject 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 these 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.

7. 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.

8. In that situation 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 ratione tempons of a Communitv 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 also satisfied it is necessary to inquire whether the action of the Council has frustrated a legitimate expectation on the pan of the applicants to the effect that the production of isoglucose would not be regulated during the period from 1 July 1979, the date from which Regulation No 387/81 retroactively applied, to 17 February 1981, the date of publication of that regulation and of Regulation No 388/81.

10. It should first be pointed out that those two regulations do not include any new measures and merely reproduce the provisions of Council Regulations Nos 1293/79 and 1592/80.

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 unforeseeability of the reinstatement with retroactive effect of the measures contained in Regulation No 1293/79 declared void by the Court and extended as from 1 July 1980 by Regulation No 1592/80.

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

13. In the firs; 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 the declaration that Regulation No 1293/79 was void, the imposition on the production of sugar in respect of the period beginning on 1 July 1979 of stabilisation measures from which the production of isoglucose would have been entirelv exempt might have had.

14. Seconds by adopting successively Regulations Nos 1111/77, 1293/79 and 1592/98 the Council had clearly manifested its intention of regulating the production of ad 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 Parliament's 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 20 December 1980 (C 334, p. 2) the applicant knew that the Commission had, as early as 3 December 1980, submitted to the Council a proposal for a regulation amending, in particular, Regulation No 1111/77, in order to reinstate, for the period from 1 July 1979 to 30 June 1980, the system of quotas and levies in the form in which that system had been laid down by Regulations Nos 1293/79 and 1592/80 and in which it was to be reinstated by the contested provisions of Regulations Nos 387/81 and 388/81.

17. In challenging the retroactivity of the regulations in dispute the applicant makes various allegations.

18. It first observes that by virtue of Article 174 of the Treaty, a measure invalidated by the Court is to be declared void and. in declaring Regulation No 1293/79 void, the Court did not 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 to be definitive. It infers from that that the obligation imposed on the Council by the first paragraph of Article 176 to take the necessarv measures to complv with the ludgment of the Court required it to invite national authorities to abolish the charge to production levy on the production ol isoglucose

19. That interpretation is incorrect. The nullitv of Regulation No 1293/79 pronounced by the Court, pamcularlv in a situation where. b\us ludgmenis of 29 October 1980, the Court had censured the failure to obtain an opinion of the Parliament but had dismissed the substantive alienations made against that regulation by the applicant and by Maizena GmbH did not compel the Council to maintain, for the period in question, a legal vacuum which would have led to an imbalance in the situation of various traders, manufacturers of sugar and isoglucose, on the market for sweeteners. On the contrary, it was open to it, under the terms of the judgments to take “all appropriate measures” to counter the effects of the declaration that Regulation No 1293/79 was void. The validity of the measures adopted by the Council in the form of Regulations Nos 387/81 and 388/81 forms precisely the subject-matter of this case.

20. The applicant then draws from the terms of Article 191 of the Treat)', under which regulations are to be published and decisions notified, the conclusion that Regulations Nos 1293/79 and 1592/80, which were individual decisions in so far as they laid down the quotas allocated to the isoglucose-producing undertakings, could not be retroactively replaced, even by virtually identical measures.

21. As regards the possibility of retroactively adopting a measure, following a declaration of nullity by the Court, no distinction may, in the case of the measures adopted in the present case, be drawn between a regulation and an individual decision. In fact, whether Regulations Nos 1293/79 and 1592/80 were followed by individual implementing measures, as was usually the case in fixing the levy due from each producer undertaking, or whether they fixed directly and individually the undertakings' quotas, in either case, it must be decided whether the principle of legal certainty protecting those concerned precluded the provisions of those regulations from being retroactively reinstated and under what conditions such retroactivity might be held to be proper.

22. Since the conditions necessary for retroactively reinstating, by means of the contested regulations, the provisions of Regulations Nos 1293/79 and 1592/80 were satisfied, the submission that the retroactivity given to Regulations Nos 387/81 and 388/81 is unlawful must be rejected.

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

23. The applicant claims that the Council has given inadequate reasons in Regulations Nos 387/81 and 388/81 for the retroactive effect given to those regulations and therefore has infringed the provisions of Article 190 of the Treaty.

24. According to the case-law 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.

25. The statement of the reasons on which Council Regulation No 387/81 is based states first that “Council Regulation (EEC) No 1111/77 of 17 May 1977 laying down common provisions for isoglucose, in the version established by Regulation (EEC) No 1293/79, provided for the application of a svstem of production quotas for the period from 1 July 1979 to 30 June 1980”and, secondly, that “in Cases No 138/79 and No 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 rejecting 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 alia the system of quotas concerned retroactively.”

26. Council Regulation No 388/81 states in particular that, following the declaration by the ludgment of the Court in Cases 138 and 139/79 that Regulation No 1293/79 was void, “in order to avoid anv doubts as to the legality of Article 2 of Regulation No I592/8C, u is appropriate that this amele should henceforth contain a reference to Article 9 of Regulation (EEC) No 1111/77 in the version established in Council Regulation (EEC) No 387/81”.

27. 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, and by the concern to preserve legal certainty which is shown in particular by Regulation No 388/81, to avoid any doubts as to the version applicable from then on of Article 9 of Regulation No 1111/77, 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 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.

28. 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 Treaty and Article 2 of the decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources

29. In its reply the applicant put forward a new submission based on the Council's lack of competence ţo create by means of Regulation No 387/81 a lew on the production of isoglucose and to extend its application by means of Regulation No 388/81. The applicant takes the view that that levy is revenue accruing to the Community budget which was not provided for by the legislation at the time at which Council Regulation No 70/243 of 21 April 1970 on the replacement of financial contributions from Member States bv the Communities' own resources was adopted (Official Journal, English Special Edition 1970 ill, p. 224). The Council therefore did not have the power to introduce the contested lew but, in pursuance of Article 2C1 of the Treats, was able merely to recommend its adoption by the Member States in accordance with their respective constitutional requirements.

30. The defendant and the intervener consider that submission to be inadmissible bv virtue of Article 42 (2) of the Rules of Procedure of the Court of Justice which allows no iresh 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.

31. In the present case, the new submission made by the applicant cannot be regarded as being “based on matters of law or 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 Regulations Nos 387/81 and 388/81 came into existence. Nor, on the other hand, can it be regarded as amplifying 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.

32. 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.

33. 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 in breach of the provisions of Article 42 (2) of the Rules of Procedure.

34. 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 isoglucosc.

35. Subiect to the procedural conditions which it lavs down, Article 43 of the Treatv assigns to the Council the usk of creating the common organization of the agricultural markets and laying down the rules relating thereto. By virtue of Amele 43 (3) ot' the Treaty, that common organization, in one of the forms provided for by paragraph (2) of that aniele, uhich comprise tnter alia a market organization, may include all measures required to attain the objectives set out in Article 39, in pamcular regulation of prices, aids for the production and marketing of the various products, storage and carryover arrangements and common machinery for stabilizing imports or exports.

36. Under the first subparagraph of Article 9 (8) of Council Regulation No 1111/17 as supplemented by the contested provisions of Regulation No 387/81, the isoglucose production lev)' is charged on the producer in respect of the quantity of isoglucose 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 1111/17 indicates, to export costs.

37. It follows from the foregoing that the isoglucose production levy comes within the terms of Articles 39 and 40 of the Treaty 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 Regulations Nos 387/81 and 388/81.

38. As regards the Council Decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities'own resources, adopted in pursuance of Article 201 of the Treaty by 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 Community 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.

39. 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 thai 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.

40. It follows thai the Council was competent to adopt the contested provisions contained in Regulations Nos 387/81 and 388/81 and that no provision of budgetary law affected thai power.

IV — Costs

41. Under ihe terms of Article 69 of the Rules of Procedure the unsuccessful panv is to be ordered to pay ihe 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 Regulations Nos 387/81 and 388/81 are void;

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