CE, Sect., 29 décembre 1997, p. 512 Case Commune d’Arcueil
29 December 1997
Translated by:
Tony Weir
Professor B. S. Markesinis

Conseil d’Etat

Considering the summary request and the complementary memorandum lodged on 31 August and 31 December 1993 respectively, on behalf of the commune of Arcueil (94110), acting through its properly appointed mayor whose office is the Hôtel de Ville, Arcueil, whereby the Conseil d’Etat is requested to annul the decision of the administrative court of appeal of Paris dated 29 June 1993 which rejected its claim that the state be held liable to pay it an indemnity of 16,824,692 francs in respect of the damage it allegedly suffered from the failure of the taxing authorities from 1965 to 1983 to subject a firm in the locality called “Centre d’Automatisation pour le Management” to the local business tax;

Considering that whereas in principle errors committed by the taxing authorities in assessing or recovering taxes do not, given the difficulties involved, make the state liable unless such errors bespeak gross negligence (faute lourde), it is different when the ascertainment of the tax liabilities of a taxpayer presents no particular difficulties;

Considering that in the decision under attack the administrative court of appeal held that the task of assessing and recovering the tax in question necessarily involves particular difficulties in ascertaining the position of taxpayers such that a mistake on the part of the taxing authorities regarding the liability of a taxpayer to a particular tax could not by itself render the state liable unless it was grossly negligent and that the mistake of the taxing authorities, if any, in not subjecting the Centre d’Automatisation pour le Management to the local business tax was not grossly negligent; that in so deciding and dismissing the claim of the commune without investigating whether in this case there were indeed any particular difficulties in ascertaining whether a company in business was taxable or not, the court committed an error of law;

Considering that it follows that the commune d’Arcueil is entitled to demand the annulment of the decision under attack;

Considering that the Centre d’Automatisation pour le Management, founded as a company, was a legal person quite distinct from the Caisse des Dépôts et Consignations; that the business in which it had engaged since its foundation, namely processing information for its customers and charging them for it, fell within the description of a business, industry or profession in the sense of article 1447 of the General Tax Code … notwithstanding that it charged for some of its services at cost only; that in such a situation the decision that it was subject to the local and business tax was one that it was not at all difficult for the taxing authorities to reach; that consequently the commune of Arcueil is entitled to maintain that in failing to subject the Centre d’Automatisation pour le Management to the local business tax the taxing authorities were guilty of a fault sufficient to render the state liable;

Considering that under article 7 of Law no. 68-1250 of 31 December 1968 “The administration which wishes to invoke the prescriptive period laid down by this law must do so before the court of first instance has ruled on the substance of the litigated claim”; that the administration cannot rely on the four-year time-bar, having raised it only on appeal;

Considering [after evaluating the amount lost by the commune as a result of the failure to exact the taxes in question] that a proper estimate of the loss suffered by the commune of Arcueil is 15,000,000 francs, inclusive of interest to date;


Article 1: The decision of the administrative court of appeal of Paris dated 29 June 1993 and the judgment of the administrative tribunal of Paris of 13 December 1991 are annulled;

Article 2: The state is held liable to the commune of Arcueil in the sum of 15,000,000 francs inclusive of interest to date; …

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