In the present case the defendant nevertheless contends that the Court has no jurisdiction and that the case does not relate to the interpretation of the Protocol but to the correct application of Belgian law to the income of the applicant's wife who is not herself an official of the Community.

This argument cannot be accepted by the Court.

In reality the dispute relates to the question whether Article 11 (b) of the Protocol allows Member States to take into account the remuneration of an official of the Community in order to determine the rate of tax applicable to his wife's income. In its defence, the defendant itself stated that this was the subject of the dispute.

The Court is therefore concerned with resolving a dispute relating to the interpretation or application of the Protocol, in particular Article 11 (b).

Consequently the contention that the Court lacks jurisdiction must be rejected.

The ECSC Treaty is based on the principle of a strict separation of the powers of the Community institutions and those of the authorities of the Member States.

Community law does not grant to the institutions of the Community the right to annul legislative or administrative measures adopted by a Member State.

Thus, if the High Authority believes that a State has failed to fulfil an obligation under the Treaty by adopting or maintaining in force provisions contrary to the Treaty, it may not itself annul or repeal those provisions but, in accordance with Article 88 of the Treaty, it may merely record such a failure and subsequently institute proceedings as set out in the Treaty to prevail upon the State in question itself to rescind the measures which it had adopted.

The same applies to the Court of Justice. Under the terms of Article 31 of the Treaty it has responsibility for ensuring that Community law is observed and by Article 16 of the Protocol has jurisdiction to rule on any dispute relating to the interpretation or application of the Protocol but it may not, on its own authority, annul or repeal the national laws of a Member State or administrative measures adopted by the authorities of that State.

This statement of the limits of the jurisdiction of the Court may further be supported by an argument stemming from the Treaties of Rome, in particular from Article 171 of the EEC Treaty and Article 143 of the EAEC Treaty which merely attach declaratory effect to the decisions of the Court in cases of failure to comply with the Treaties, albeit obliging the Member States to take the necessary measures to comply with the judgment.

The Court finds that there is no foundation to the argument of the applicant that the protection of the privileges and immunities conferred by the Protocol would be ineffective and the judgment of the Court of Justice reduced to a mere opinion if it were unable to annul illegal measures adopted by national authorities and order the Member States to make reparation for the resultant damage.

The applicant bases his reasoning on the text of Article 16 of the Protocol on the Privileges and Immunities in conjunction with Article 43 of the ECSC Treaty on the grounds that the above-mentioned Article 16 refers not only to interpretation but also to the application of that Protocol.

Nevertheless it would be erroneous to accept that this provision enables the Court to interfere directly in the legislation or administration of Member States.

In fact if the Court rules in a judgment that a legislative or administrative measure adopted by the authorities of a Member State is contrary to Community law, that Member State is obliged, by virtue of Article 86 of the ECSC Treaty, to rescind the measure in question and to make reparation for any unlawful consequences which may have ensued. This obligation is evident from the Treaty and from the Protocol which have the force of law in the Member States following their ratification and which take precedence over national law.

Consequently if in the present dispute the Court were to rule that the tax assessment in question was unlawful, it would necessarily follow that the Belgian government would be obliged to adopt the requisite measures to cancel it and to reimburse to the applicant any amounts which were wrongfully collected.

For all the above reasons the conclusions of the applicant, in so far as they seek the annulment of the tax assessment at issue and an order for the defendant to repay the amounts paid are inadmissible as the Court has no power to act in this way. The same applies in respect of the application for a declaration that the tax assessment in question be declared void and of no effect.

The same applies again to the application for an order that the defendant pay compensatory interest in respect of tax unlawfully levied. It is for the national legislature to determine whether an unlawful imposition gives rise to a claim for compensatory interest.

On the same principles the application for repayment of the penalty imposed on the applicant for supplying an incomplete declaration of his income must be rejected.

(a)By giving a right of recourse based on Article 16 of the Protocol, the authors of the Protocol clearly sought to ensure compliance with the privileges and immunities therein prescribed, in the interests not only of the Community and its institutions but also of the individuals to whom these privileges and immunities were granted and, on the other hand, in the interests of the Member States and of their administrative authorities which need to be protected against too wide an interpretation of those privileges and immunities.

It is thus quite acceptable for an official of the Community to appear before the Court of Justice as an applicant against the government of his own country in the same way as undertakings have already contested before the Court of Justice arguments submitted by the governments of their countries, intervening in support of the High Authority.

Although the privileges and immunities were granted solely in the interests of the Community it must not be forgotten that they were expressly accorded to the officials of institutions of the Community.

The fact that the privileges, immunities and facilities were provided in the public interest of the Community certainly justifies the power given to the High Authority to determine the categories of officials to which they are applicable (Article 12) or where appropriate to waive the immunity (second paragraph of Article 13) but does not mean that these privileges are granted to the Community and not directly to its officials. This interpretation is, furthermore, clearly supported by the wording of the abovementioned provisions.

Therefore the Protocol confers an individual right on the persons concerned, compliance with which is ensured by the right of recourse provided for in Article 16 of the Protocol.

(a)The question must first of all be resolved whether action by an official of the Community who regards himself as being prejudiced by an infringement of the Protocol by a Member State is not exclusively a matter for the Community or the institution to which the official belongs. Examination of this question is all the more necessary as no provision of the ECSC Treaty permits individuals to bring an application directly to the Court in reliance on infringement of the Treaty by a Member State but, on the contrary, in principle it is for the High Authority to act against such an infringement by applying the procedure provided for this purpose in Article 88 of the Treaty.

Nevertheless the authors of the Treaty certainly do not overlook the fact that disputes capable of arising concerning the interpretation or application of the Protocol would arise in the first place from controversies between the parties on whom the Protocol confers privileges and immunities and the authorities which have an interest in the restrictive interpretation of those privileges and immunities.

In this respect the parties to the present suit appear to be typically parties to a dispute within the meaning of Article 16.

In addition, as has already been stated above, the privileges set out in the Protocol confer individual rights on the persons to whom it applies as is evidenced by the German and Dutch equivalents of the term privilege (Vorrechte and voorrechten). It may generally be presumed that a substantive right has as its corollary that it provides the person in whose interest it operates with the means of enforcing it himself by proceedings before the courts rather than by the intervention of a third party.

In these circumstances it is proper to apply the principle whereby, in case of doubt, a provision establishing guarantees for the protection of rights cannot be interpreted in a restrictive manner to the detriment of the individual concerned.

Finally it must not be overlooked that Article 16 does not contain the limitations laid down in Article 33 of the Treaty.

Consequently, neither the Belgian legislation and case-law nor the practice followed in analagous cases by the Belgian authorities can be relevant to this case since they resolve the problem in the light of national law.

This line of reasoning is unacceptable to the Court.

On the one hand it has not been established that the words exempt (exonérés) and immune (immunises) are employed in international fiscal terminology to designate different concepts.

Furthermore, it appears from the heading to Chapter V of the Protocol Members of the High Authority and officials of the institutions of the Community that the Protocol was concerned with regulating as a whole the legal position of these persons which explains why the authors of the Protocol chose the consistent method of attaching the various points listed in Article 11 subparagraphs (a) to (d) to the person of the Member or official rather than to the object of the different privileges and immunities.

Literal interpretation of the text supports the view advocated by the applicant.

In fact the words shall be exempt from any tax on salaries indicate clearly and unambiguously exemption from any fiscal charge based directly or indirectly on the exempted remuneration.

Against this it may not be contended that the term on salaries justifies the converse argument that Article 11 does not prevent the taxation of other income at a higher rate by reason of the remuneration in question.

Such taxation would be contrary to the exemption provided by Article 11 since the Community salary, which is exempt from all taxation, would even in this case constitute the legal basis of the taxation in question.

Furthermore the ECSC Protocol (and also the EEC and EAEC Protocols) contains no provision stating that the exemption of Community salaries does not prevent this income from being included in the total taxable income for the purpose of a tax of similar scope to that of the Belgian surtax whilst most of the more recent international agreements relating to double taxation expressly contain this reservation.

Among the agreements containing this reservation there are some concluded by one or other of the Member States shortly before (see for example Article XIX (1) of the Convention of 29 April 1948 between the Netherlands and the United States of America; Article 6 of the Convention of 25 September 1948 between Belgium and the Netherlands) or shortly after the signature of the ECSC Treaty (see for example Article XVI (d) of the Convention of 27 March 1953 between Belgium and the United Kingdom; Article 18 of the Convention of 1 April 1953 between Belgium and Sweden etc.) and in any event before the signature of the EEC and EAEC Treaties.

In these circumstances if the High Contracting Parties indeed had the intention of allowing the national authorities to take into account Community emoluments for the purpose of determining the rate of the surtax or other taxes of similar scope, it is inexplicable why they failed to include an express reservation similar to that contained in the conventions referred to above as the problem could not have been unknown to the delegations which undertook the drafting of the provisions submitted for examination by the Court.

Nevertheless it is not sufficient for the Court to adopt the literal interpretation and the Court considers it necessary to examine the question whether this interpretation is confirmed by other criteria concerning in particular the common intention of the High Contracting Parties and the ratio legis.

The opinions of the governments put forward during the parliamentary debates on the ECSC Treaty do not touch on this question.

The same is true of the parliamentary votes on the EEC and EAEC Treaties which contain a provision in substantially the same terms. Most of the statements by the governments did not deal with the question, the exception being that of the Luxembourg government, concerning the EAEC Treaty; this asserts that the provision adopted will not prevent the national tax authorities from taking into account the exempted income for the purpose of calculating the rate of tax applicable to the non-exempt income, that is to say income arising from sources other than the emoluments paid by the Communities.

Quite apart from the fact that it refers to the Protocols annexed to the Treaties of Rome and not to the ECSC Protocol, this passage does not in itself prove that the authors of the Treaties were all in agreement on this interpretation. On the contrary it raises afresh the question whether the common intent of the contracting parties applied equally to the secondary effects of the exemption granted which have been at issue in the present case.

A comparison of the various national laws reinforces these doubts.

Indeed, whilst it is true that the finance law of the French Republic is based on the same principles as the case-law and practice in Belgium, it is clear from the legislation of the Federal Republic of Germany that it interpreted the Protocol in the sense advocated by the applicant. The German Law on the taxation of income (Einkommensteuergesetz), in the versions of 23 September 1958(Bundesgesetzblatt I, p. 672) and of 11 October 1960 (Bundesgesetzblatt I, p. 789) incorporated Article 11 (b) of the Protocol into German law by including it at No 34 of Paragraph 3 under exempt incomes.

Therefore the German legislature does not share the view of the Belgian administration that the Protocol does not provide for exemption of the income but merely for exemption of the officials.

(a)It may be stated that only the exemption of remuneration paid by the Community from all national tax enables the institutions of the Community to exercise effectively their right to fix the effective amount of the remuneration of their officials, a right which is accorded to them by the Treaty (Article 78 of the ECSC Treaty, Articles 15 and 16 of the Protocol on the Statute of the Court of Justice of the ECSC).

If the Member States retained the right to assess the salaries of officials of the ECSC to tax, each according to its own fiscal system, the Community would in effect no longer be able to determine the net income of its officials.

Nevertheless it is the fixing of the net income which enables the institutions to evaluate the services of their officials and which enables the officials to assess the post offered to them.

The application of national tax laws to the salaries paid by the Community would thus detrimentally affect the Community's exclusive power to fix the amount of those salaries.

This reasoning is confirmed by the Treaties establishing the EEC and the EAEC which, while providing for a tax on salaries paid by the Communities for the benefit of the Communities, nevertheless reserve the power to determine this tax as well as to determine salaries to an institution of the Community, that is to say, its Council (first paragraph of Article 12 of the Protocols on the Privileges and Immunities of the EEC and EAEC; Article 212 of the EEC Treaty, Article 186 of the EAEC Treaty).

Taken as a whole, the three Treaties in this respect share common ground in that they withdraw the remuneration paid to officials of the Community from the Member States' sovereignty in tax matters.

In this way the Treaties sought to reinforce the independence of the administrative departments of the Community vis-à-vis the national powers.

Indeed it is contrary to the principle recognized by the law of the European Communities which provides for a clear distinction between income subject to the control of the national tax authorities of the Member States on the one hand and the salaries of officials of the Community on the other; by the terms of the Treaties of Rome, the latter are subject to Community law alone as regards any liability to tax while the other income of officials remains subject to taxation by the Member States.

This division of reciprocal fiscal jurisdiction must exclude any taxation, direct or indirect, of income which is not within the jurisdiction of the Member States.

(a)The system adopted by the Belgian tax authorities with regard to the application of the surtax to officials of the ECSC constitutes indirect taxation of Community salaries.

The defendant argues that the system is not contrary to the provisions of Article 11 (b) of the Protocol since the remuneration paid by the Community is not subjected to any tax. The tax is merely imposed on other income by applying the rate which would be applicable to the income band resulting from the fictitious addition of the Community salary to the other income.

This argument fails to recognize certain effects of the taxation system provided for by the Belgian Law on the surtax (or by the similar systems in force in other Member States) whereby the taxable income is divided into bands which are taxed at progressively higher rates.

Application of this system of taxation gives rise to no difficulties where all of the taxpayer's income is liable to tax. In fact the application of different rates to different bands does not prevent the imposition of a single total sum of tax covering the whole of the income with the result that the highest rate applied to the highest band in reality also covers the whole of the income.

Normally therefore it is of no importance whether a particular item of income is included in the lower or higher bands as the amount of the total tax on the whole income is always the same.

On the other hand the system used by the Belgian tax authorities in respect of officials of the ECSC entails, for reasons which cannot be justified, the inclusion of income other than Community salaries in the higher bands and the application of a higher rate than would have been applied to it if the Community salary had not been taken into account.

For this reason income other than the Community salary is assessed to tax at a rate which is not that appropriate to its actual amount.

Consequently the Community salary is indirectly assessed to tax as only the taking into account of this salary permits the application to the other income of a rate higher than that which would have been applicable to it.

Nevertheless the Belgian tax law regards the assets of the two spouses, even if they are separate in the eyes of civil law, as a single unit from the point of view of tax law. The effects of the tax in question on the common income cannot be and indeed are not denied.

As the indirect taxation of the remuneration of an official of the Community for the purpose of an assessment on both the spouses by taking it into account in order to determine the rate of tax is prohibited, the same prohibition must also apply in the case of a single assessment on the official alone.

This is certainly true in cases where the husband is also personally liable for the payment of the tax imposed on the assets of his wife.

The system of combined assessment of the spouses as provided for by Article 43 of the Belgian consolidated laws has this effect.

Consequently the defendant cannot rely on the fact that the person accorded the privilege who is referred to in the Protocol and the spouse whose income has been charged to tax are not one and the same.

On the contrary rather, the principle that the remuneration referred to in Article 11 (b) of the Protocol cannot be taken into account for the purpose of determining the rate applicable to other income applies equally where the latter income was received by the spouse of the official who is exempted.

For all the above reasons the first two conclusions of the applicant with the exception of the application for a declaration that the assessment made on him was void and of no effect are well-founded.

Consequently the competent Belgian authorities are obliged, in accordance with Article 86 of the ECSC Treaty, to nullify the effects of the measures whereby the assessment was made and confirmed.