Paragraph 126 (5) of the Finanzgerichtsordnung does not stand in the way of a reference for a preliminary ruling. Even if another meaning had to be given to the contents of this provision, the reasoning of the Bundesfinanzhof in its order for a preliminary ruling could not be adopted, according to which it is necessary to distinguish between the theoretical possibility of putting a case to the Court and the power of making use of this possibility in a concrete case. If this argument were accepted, the national legislature could to a large extent render inoperative the provision of the second paragraph of Article 177 by enacting provisions which would limit its effect. Such a limitation on the useful effect of Article 177 by the national legislature would infringe the EEC Treaty and would lead to the initiation of procedure under Articles 169 et seq. of the EEC Treaty.

In the same way it is impossible to limit the power of referring a case for a preliminary ruling by invoking the binding nature of judgments of superior courts, which in practice would exclude the power to submit cases to the Court.

What holds good for the national legislature holds equally well for the national courts, since the latter are bound, in the same way as the legislature, to conform to Community law.

The Commission further states that it is necessary to distinguish between the binding effect referred to in Paragraph 126 (5) of the Finanzgerichtsordnung and the binding effect of res judicata. The first concept was introduced into the German law of procedure to speed the final decision which has to be given in the case, whereas the object of the binding force of res judicata is to put a definite end to the proceedings and binds both the court and the parties.

Consequently it is not possible to regard Paragraph 126 (5) and the principal of res judicata as being on the same level.

If the effect of Paragraph 126 (5) is regarded as limited as compared with the power of res judicata, the question of priority could be solved simply and correctly in favour of Community law: so long as the proceedings are still pending before the national court, the possibility of referring a case for a preliminary ruling as provided for by the second paragraph of Article 177 must be kept open.

This legal construction would prevent, as far as possible, judgments of national courts from infringing Community law.

In the Commission's view the question referred for a preliminary ruling could be replied to in the following manner:

The second paragraph of Article 177 of the EEC Treaty gives to the courts or tribunals of Member States, against whose decisions there is a judicial remedy under national law, a completely unfettered right. The provisions or principles of national law cannot preclude a national court or tribunal from referring a case to the Court of Justice for a preliminary ruling and complying therewith.

In the present matter the court submitting the case is bound by the interpretation of the Court, even if this interpretation conflicts with the superior court's view of the law and even if the court making the submission is bound under national law to accept the superior court's view of the law.

The plaintiff denies that the organs of the EEC can initiate proceedings against a Member State, where a final court has omitted to refer a case to the court for a preliminary ruling. Member States cannot be held responsible for the omissions of independent courts.

Paragraph 126 (5) of the Finanzgerichtsordnung gives to the decisions of final courts a binding effect similar to the force of res judicata. The court to which the matter is sent back for reconsideration is bound, just as are the parties, by the decisions on appeal of the Bundesfinanzhof.

Consequently it is not open to the Finanzgericht to refer a case to the Court of Justice when it is required to give a judgment based on a judgment of the Bundesfinanzhof.

The Court of Justice itself should inquire whether national courts are entitled to refer cases for preliminary rulings. In order to avoid useless conflicting judgments the Court ought to declare as unacceptable requests for a preliminary ruling emanating from national courts which are already bound by a national decision of a supreme court.

If the Court considers that it does not have to examine admissibility on the footing that the judge who has been directed to reconsider a matter is bound by the judgment of the superior national court, it ought to allow the national court not to take account of preliminary rulings which have been given conflicting with a decision emanating from the superior national court.

The plaintiff proposes that the following reply should be given to the question submitted by the Bundesfinanzhof for a preliminary ruling:

1.The second paragraph of Article 177 of the EEC Treaty does not give to a national court or tribunal, against whose decision there is a judicial remedy under national law, a completely unfettered right to refer questions to the Court of Justice. On the contrary, Article 177 of the EEC Treaty cannot avoid the provisions of national law under which courts are bound by the ruling of a superior national court.2.Alternatively

The question whether, in the event of a ruling conflicting with that of the Court, the national decision of the supreme court retains its binding effect — as provided for by Paragraph 126 (5) of the Finanzgerichtsordnung — is in essence a question of national law. The superior court sitting on appeal on a point of law is entitled to enquire whether the conditions laid down in the second paragraph of Article 177 are complied with by the inferior court bound under Paragraph 126 (5) of the Finanzgerichtsordnung by the ruling of the superior court. Where it considers that the conditions have not been complied with, the preliminary ruling of the Court has not binding effect.

Since the proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before a national court, the decision on costs is a matter for that court.