Doyle v an Taoiseach

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice Barrington
Judgment Date01 January 1986
Neutral Citation1983 WJSC-HC 2415
Date01 January 1986

1983 WJSC-HC 2415

THE HIGH COURT

1979 No. 3852P
DOYLE v. TAOISEACH & ORS.
BETWEEN:-
MARTIN DOYLE M.A. MOLLOY AND SONS LIMITED MESSRS. F.X. BUCKLEY LIMITED
McMONAGLE LIVESTOCK EXPORTERS LIMITED
Plaintiffs
-and -
TAOISEACH TANAISTE MINISTER FOR FINANCE MINISTER FOR DEFENCE MINISTER FOR PUBLIC SERVICE MINISTER FOR HEALTH AND SOCIAL WELFARE MINISTER FOR FISHERIES MINISTER FOR TOURISM AND TRANSPORT MINISTER FOR POSTS AND TELEGRAPHS MINISTER FOR AGRICULTURE MINISTER FOR INDUSTRY AND COMMERCE AND ENERGY MINISTER FOR DEFENCE MINISTER FOR JUSTICE MINISTER FOR FOREIGN AFFAIRS MINISTER FOR THE ENVIRONMENT MINISTER FOR LABOUR MINISTER FOR GAELTACHT MINISTER FOR EDUCATION MINISTER FOR ECONOMIC PLANNING AND DEVELOPMENT THE ATTORNEY GENERAL

AND

THE REVENUE COMMISSIONERS
Defendants

Words & Phrases: Excise duty

Subject Headings:

EUROPEAN COMMUNITIES: taxation

STATUTE: instrument

1

Judgment of Mr. Justice Barrington delivered the 26th day of April 1983.

2

This case concerns the 2% levy on agricultural produce introduced by the Government in May 1979 and which expired on the 31st December 1979.

3

The first three plaintiffs are butchers and the fourth named plaintiff is an exporter of livestock. These plaintiffs are only concerned with the levy in so far as it affected live bovine animals. This levy was introduced by Statutory Instrument No. 152 of 1979 which was an order made by the Government (the first named defendants). The collection of the levy is regulated and secured by an order made by the Revenue Commissioners (the third named defendants).

4

The case raised issues similar to, but not identical with issues raised in the case of the Irish Creamery Milk Suppliers Association and others, plaintiffs and The Government of Ireland and others, defendants.

5

The levy was introduced through a series of governmental orders which between them affected fresh milk, live domestic bovine animals, cereals and sugar beet. The plaintiffs in both actions attacked the orders introducing the levy as being contrary to the Treaty of Rome and the Constitution of Ireland and as being ultra vires the Government and the Revenue Commissioners.

6

The plaintiffs in both cases applied to me to refer the issues concerning the validity of the levies having regard to the Treaty of Rome and subordinate European legislation to the European Court pursuant to the provisions of Article 177 of the Treaty.

7

I acceded to the plaintiffs" applications in both cases and referred the relevant issues in both cases to the European Court, in November 1979.

8

The Irish Creamery Milk Suppliers case was listed in the European Court as case 36 of 1980 and the present case was listed as case 71 of 1980. By order of the European Court dated the 16th September 1980 the Court joined both cases for the purposes of oral procedure and judgment.

9

The European Court delivered its judgment in open Court on the 10th March 1981.

10

Both actions were listed for trial before me on the 5th October 1982 when I was informed that the issues arising in the Irish Creamery Milk Suppliers case had been settled and, on consent, I dismissed that action. I am accordingly not now concerned with the validity of the orders in so far as they affect fresh milk, cereals or sugar beet. I am only concerned with the orders affecting live bovine animals. Even there I am not concerned with the rights of producers but only with those of butchers and exporters of livestock. Proceedings in European Court

11

The question posed in the reference to the European Court was the following:-

"Is a national tax, such as that in issue in the present case, contrary to the Treaty establishing the European Economic Community and, in particular, to Article 9, 11, 12, 16, 17 or 38 to 46 of the said Treaty, or to any of them, or to Council Regulations Nos. 804/1968, 805/1968, 330/1974 and 2727/1975, or any of them."

12

The relevant issues in the case and the respective contentions of the parties were, by agreement, summarised in the reference to the Court as follows:-

13

2 "1. The Government of Ireland, by virtue of the Statutory Instruments following that is to say;

15

(b) the Agricultural Produce (Cattle and Milk) Regulations, 1979, Statutory Instrument No. 160 of 1979

16

imposed subject to the conditions and exceptions contained in the said Instruments, an excise duty of 2% upon the chargeable value as therein defined, of the several agricultural products, that is to say, cattle, fresh milk, cereals and sugar beet which are referred to therein. The duty is applied at the point at which the product is delivered for slaughter or in an unprocessed form for processing within the State, or exported live or in its unprocessed form from the State. The person accountable for the duty is the proprietor of the premises to which the product has been delivered for processing, or in which it had been slaughtered, or the exporter of the product, as the case may be. That person may, however, withhold a sum equal to the amount of the duty from the price payable to the seller of the product. There are ancillary provisions providing inter alia for the right of the proprietor of the premises to recover the amount of the duty from the owner of the produce, in certain circumstances.

17

2. The duty is a temporary imposition and is leviable during a period commencing on the 1st May 1979, and ending on the 31 at December 1979. ............

18

4. At the hearing of an application by the fourth named plaintiff, for an interlocutory injunction to restrain the collection by the State of the said duty pending the trial and determination of this action, it has been contended by the plaintiffs that the scheme of duty instituted by the said Statutory Instruments û

19

(a) contravenes the common organisation of the market for each of the said agricultural products.

20

(b) is not permissible in that it constitutes unilateral action taken by the Government of Ireland which affects the machinery of price formation established "by the common organisation of the market for each product.

21

(c) is prohibited by the said Treaty, in that it constitutes a customs duty on exports or imports or a charge having equivalent effect.

22

(d) the duty has the actual or potential effect of distorting the common organisation of the market in agricultural products.

23

5. It has been contended on behalf of the defendants that

24

(a) the duty does not contravene or interfere with the operation of the common organisation of the market for any of the said products.

25

(b) the duty does not affect the operation of the machinery of price formation established by the common organisation of the market for any of the said products. The effect of the scheme of duty is that the proprietor of the premises in which the product is to be processed or slaughtered may withhold from the amount which would otherwise be payable to the producer thereof, a sum equal to the amount of the duty. This sum is payable to the Revenue Commissioners.

26

(c) any consequent diminution of the returns to the producers of the products in question arises from the valid imposition by the State of a duty with the object of indirectly imposing taxation on the producers of the products.

27

(d) the duty is an internal tax on internal production and does not distort the free circulation or movement of goods within the European Economic Community or the prices at which these are traded.

28

(e) the duty does not apply to imports from other member states or to re-exports originating in those states.

29

(f) the duty is a tax falling within a general system of internal taxation applying to the products in question according to the same criteria, whether they are for disposal on the home market or for "export.

30

(g) the proceeds of the duty are not applied for any specific purpose but are paid into the exchequer.

31

However, the proceeds of the duty during the period of its application is equivalent to only part of the cost to the State of providing free educational research and advisory services for the Agricultural Community during the period, and are intended as a partial recoupment of that expense incurred by the State.

32

6. The High Court, being of opinion that the issues in the case raise a question as to the interpretation of the provisions of the Treaty establishing the European Economic Community and of secondary legislation adopted thereunder, has decided, at this stage of the proceedings, without determining the question or questions of fact which are at issue between the parties, to request a preliminary ruling from the Court of Justice of the European Communities, pursuant to Article 177 of the Treaty establishing the European Economic Community, on the question set out as Question No. 2 below."

33

The European Court in its judgment refers to a letter dated the 2nd October 1979 from the Government of Ireland to the European Commission setting out the reasons for the introduction of the levy. The letter reads as follows:-

"For historic reasons the level of prosperity and the stage of development of agriculture in Ireland has until recently lagged behind that of other sectors of the economy. This was reflected in a relatively favourable tax regime for agriculture particularly as regards income tax. Since 1972 the prosperity of agriculture has made rapid progress largely due to the influence of the C.A.P. and the tax system has been progressively modified to bring it into line with that "applicable to other sectors with comparable incomes. While this process was not completed at the time of the 1979 Budget, the Government was conscious at that juncture of the fact that the agricultural sector was now in a much better position to pay for the...

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