The Failure to Reply a Specific Question Posed by the National Judge: a Specific Case of Lack of Legal Protection at the Level of the European Court of Justice

A remarkable feature of the decisions of the European Court of Justice (“ECJ”) in the area of direct taxes is that under the preliminary ruling procedure provided for by art. 234 of the EC Treaty there is a clear and direct connection between the questions raised by the national court and the decision of the Court. As a consequence of this practical approach, a way of looking the case law of the ECJ in the area of direct taxes under the preliminary ruling procedure is to consider it as a set of individual replies to the questions posed by domestic courts. Under this system created by the ECJ initially (first stage) there is a cooperation between the ECJ and the national judge to reach adjudication by the former on the claims raised by the latter, and subsequently when the decision is rendered (second stage), there is a duty of the Member States to provide actual reparation. So lack of legal protection to the taxpayer can result from a failure occurring in the first stage (i.e. the lack of a clear legal answer given by the ECJ to the issues raised by the taxpayer), or from a failure occurring in the second stage (i.e. the total or partial lack of implementation of the decision at the level of the Member State). We are interested in the paper at failures occurring in the first stage of the cooperation between the ECJ and the national judge. In this respect the ECJ has clarified that the preliminary ruling procedure provided for by art. 234 of the Treaty is a means of cooperation between the national judge and the ECJ in which the ECJ must give a decision if so requested by the national judge. This kind of procedural device is in line with the principle of Western legal culture that in adjudication through the court system there is an obligation for the judge to provide a remedy to the claims raised by the claimants by rendering a decision. In this respect the ECJ has clarified that, under the preliminary ruling procedure of Article 234 of the EC Treaty, the reference of the case by a national judge can be rejected only if Art. 234 is misused, if there is a contrived dispute, or community law clearly does not apply. The paper conducts an analysis of the situations of lack of legal protection at the level of the ECJ and at the level of Member States, with particular attention to the most favoured nation principle in community tax law, the elimination of double taxation, and the requirement that cross-border exercise of a freedom be of an “economic nature”.