C-733/23 Beach and bar management

Provisional text

ENJUDGMENT OF THE COURT (First Chamber)

3 July 2025 (*)

( Reference for a preliminary ruling – Common system of value added tax (VAT) – Directive 2006/112/EC – Article 273 – Article 49(3) and Article 50 of the Charter of Fundamental Rights of the European Union – Principle ne bis in idem – Duplication of criminal and administrative penalties in respect of the same offence – Financial penalty and sealing of a commercial premises – Provisional enforcement of sealing – Principle of proportionality )

In Case C‑733/23,

REQUEST for a preliminary ruling under Article 267 TFEU from the Аdministrativen sad Burgas (Administrative Court, Burgas, Bulgaria), made by decision of 21 November 2023, received at the Court on 1 December 2023, in the proceedings

‘Beach and bar management’ EOOD

v

Nachalnik na otdel ‘Operativni deynosti’ – Burgas pri Direktsia ‘Operativni deynosti’ pri Tsentralno upravlenie na Natsionalna agentsia za prihodite,

THE COURT (First Chamber),

composed of F. Biltgen, President of the Chamber, T. von Danwitz (Rapporteur), Vice-President of the Court of Justice, acting as Judge of the First Chamber, A. Kumin, I. Ziemele and S. Gervasoni, Judges,

Advocate General: M. Campos Sánchez-Bordona,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– ‘Beach and bar management’ EOOD, by M. Yakimov,

– the Bulgarian Government, by T. Mitova and S. Ruseva, acting as Agents,

– the European Commission, by P. Carlin and D. Drambozova, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 13 February 2025,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling concerns the interpretation, first, of Article 325 TFEU, secondly, of Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’), and, thirdly, of the first paragraph of Article 47, Article 48(1), Article 49(3) and Article 50 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

2The request has been made in proceedings between the commercial company ‘Beach and bar management’ EOOD and the Nachalnik na otdel ‘Operativni deynosti’ – Burgas pri Direktsia ‘Operativni deynosti’ pri Tsentralno upravlenie na Natsionalna agentsia za prihodite (Head of the ‘Operational Activities’ Department – City of Burgas, at the ‘operational activities’ Directorate at the National Public Revenue Agency, Bulgaria) (‘the tax authority’), concerning a coercive administrative measure imposed following the finding of administrative infringements which are also subject to financial penalties, imposed together with that measure.

Legal context

European Union law

The FEU Treaty

3Article 325 TFEU:

‘1. The [European] Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States, and in all the Union’s institutions, bodies, offices and agencies.

2. Member States shall take the same measures to counter fraud affecting the financial interests of the Union as they take to counter fraud affecting their own financial interests.

3. Without prejudice to other provisions of the Treaties, the Member States shall coordinate their action aimed at protecting the financial interests of the Union against fraud. To this end they shall organise, together with the [European] Commission, close and regular cooperation between the competent authorities.

4. The European Parliament and the Council [of the European Union], acting in accordance with the ordinary legislative procedure, after consulting the [European] Court of Auditors, shall adopt the necessary measures in the fields of the prevention of and fight against fraud affecting the financial interests of the Union with a view to affording effective and equivalent protection in the Member States and in all the Union’s institutions, bodies, offices and agencies.

5. The Commission, in cooperation with Member States, shall each year submit to the European Parliament and to the Council a report on the measures taken for the implementation of this Article.’

The Charter

4Article 49(3) of the Charter is worded as follows:

‘The severity of penalties must not be disproportionate to the criminal offence.’

5Article 50 of the Charter states:

‘No one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law.’

The VAT Directive

6Article 2(1)(a) of the VAT Directive provides that the supply of goods for consideration within the territory of a Member State by a taxable person acting as such is subject to value added tax (VAT).

7Under Article 273 of that directive:

‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.

The option under the first paragraph may not be relied upon in order to impose additional invoicing obligations over and above those laid down in Chapter 3.’

Bulgarian law

The Law on VAT

8Article 118(1) of the Zakon za danak varhu dobavenata stoynost (Law on value added tax) (DV No 63 of 4 August 2006), in the version applicable to the facts at issue in the dispute in the main proceedings (‘the Law on VAT’), provides:

‘Any person registered or not registered under this law is obliged to register and record in writing the supplies and sales made by him or her on business premises by issuing a fiscal cash register receipt generated by a fiscal memory device (cash register receipt) or a cash register receipt generated by an automatic integrated business management system (system receipt), irrespective of whether or not another tax document is requested. The recipient must receive the cash register receipt or the system receipt and keep it until he or she has left the premises.’

9Article 185(1) and (2) of that law provides:

‘(1) Failure to issue a supporting document referred to in Article 118(1) shall, for natural persons who are not traders, be sanctioned by a fine of between 100 and 500 [leva] (BGN) [approximately EUR 50 to EUR 250] and, for legal persons and individual traders, by a financial penalty of between BGN 500 and BGN 2 000 [approximately EUR 250 to EUR 1 000].

(2) Apart from the cases referred to in paragraph 1, any person who commits or permits the commission of an offence referred to in Article 118 or in a legislative act implementing that article shall be liable to a fine of between BGN 300 and BGN 1 000 [approximately EUR 150 to EUR 500] for natural persons who are not traders, or to a financial penalty of between BGN 3 000 and BGN 10 000 [approximately EUR 1 500 to EUR 5 000] for legal persons and individual traders. Where the offence does not result in a failure to indicate tax revenue, the penalties provided for in paragraph 1 shall be imposed.’

10Article 186 of that law, in the version applicable to the facts at issue in the dispute in the main proceedings, provides:

‘(1) The coercive administrative measure of sealing business premises for a period of up to 30 days shall be ordered, irrespective of the fines or financial penalties provided for, against any person who:

1. fails

(a) to issue a document evidencing the sale concerned as provided for in Article 118.

…

(3) The coercive administrative measure pursuant to paragraph 1 shall be applied by means of a reasoned injunction issued by the revenue service or by an official authorised by that department.

(4) An appeal shall lie against the injunction referred to in paragraph 3 in accordance with the procedure laid down in [the Administrativnoprotsesualen kodeks (Code of Administrative Procedure) (DV No 30 of 11 April 2006), in the version applicable to the facts at issue in the main proceedings].’

11Article 187(1) of that law is worded as follows:

‘Where a coercive administrative measure is ordered pursuant to Article 186(1), access to the person’s business premises shall also be prohibited and the property present in those premises and in the adjoining storage facilities shall be removed by the person or by his or her authorised representative. The measure shall apply to the premises where the offences were established, including where the premises are managed by a third party at the time of sealing, if that third party knows that the premises will be placed under seal. The National Revenue Agency shall publish on its website the lists of business premises to be sealed and their location. The person shall be deemed to be aware of the sealing of the premises where a notice of sealing has been permanently affixed to the premises or where information about the business premises to be sealed and their location has been published on the website of the revenue administration.’

12Under Article 188(1) of the Law on VAT, in the version applicable to the facts at issue in the main proceedings:

‘The coercive administrative measure referred to in Article 186(1) shall be provisionally enforceable under the conditions laid down in Article 60(1) to (7) [of the Code of Administrative Procedure].’

The Law on administrative offences and penalties

13Article 22 of the Zakon za administrativnite narushenia i nakazania (Law on administrative offences and penalties) (DV No 92 of 28 November 1969), in the version applicable to the facts at issue in the dispute in the main proceedings, provides:

‘Coercive administrative measures may be applied to prevent and stop administrative offences and to prevent and eliminate their harmful consequences.’

14Article 27(1), (2), (4) and (5) of that law provides:

‘(1) The administrative penalty shall be determined in accordance with the provisions of this Law within the limits laid down for the offence committed.

(2) In the determination of the penalty, account shall be taken of the severity of the offence, the reasons for its commission and other mitigating and aggravating circumstances, as well as the financial situation of the offender.

…

(4) Except in the cases provided for in Article 15(2), the penalties attached to offences may not be replaced by penalties of a lighter nature.

(5) Nor is it permissible to fix the penalty below the minimum penalty provided for, whether it be a fine or a temporary deprivation of the right to pursue a particular occupation or activity.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

15Beach and bar management is a legal person governed by Bulgarian law which operates a commercial premises comprising a bar and a restaurant.

16On 4 August 2022, during an inspection of those premises, inspectors from the National Public Revenue Agency found that Beach and bar management had failed to register 85 sales by means of fiscal cash register receipts, which had therefore not been issued to customers. On that basis, in total, a finding of 85 administrative offences of the Law on VAT was established.

17On 12 August 2022, the tax authorities issued an order imposing a coercive administrative measure ‘sealing the business premises and prohibiting access thereto’ for a period of 14 days. That measure was coupled with an order authorising its provisional enforcement.

18The measure sealing the business premises and the provisional enforcement order that was incorporated into the order itself were the subject of two separate actions brought before the Administrativen sad Burgas (Administrative Court, Burgas, Bulgaria). The actions at issue were dismissed. The measure sealing the business premises and prohibiting access thereto for a period of 14 days was carried out.

19In addition, for each of the 85 offences committed by Beach and bar management, a financial penalty of BGN 500 (approximately EUR 250) was imposed. Accordingly, the total penalty for all of those offences amounted to BGN 42 500 (approximately EUR 21 250), whereas the total amount of VAT evaded on account of the failure to issue fiscal cash register receipts in respect of all the payments corresponding to those offences, made by a cash register, amounted to BGN 268.02 (approximately EUR 134).

20As is apparent from the order for reference, the legality of the 85 financial penalties was challenged before the Rayonen sad Burgas (District Court, Burgas, Bulgaria). That court dismissed the actions concerning those measures before the judgment of 4 May 2023, MV – 98 (C‑97/21, EU:C:2023:371), was delivered. In the grounds for its decisions, that court neither took account of the fact that, following the order imposing the coercive administrative measure in respect of all of the 85 offences and the provisional enforcement of that measure, the sealing of the business premises concerned and prohibiting access thereto for a period of 14 days had been carried out, nor examined or considered the legal effects of that enforcement on the proceedings relating to the review of the legality of the financial penalties imposed at the same time.

21The 85 decisions of that court were all the subject of an action before the Administrativen sad Burgas (Administrative Court, Burgas), which is the referring court.

22The referring court notes that, in the event of an infringement of Article 118(1) of the Law on VAT, that law provides, in Article 185 thereof, not only for the imposition of a financial penalty but also, in Article 186 thereof, for the obligation, on the basis of the same facts, for the imposition of a coercive administrative measure involving the sealing of the premises in question.

23The referring court states that the financial penalty and the placing under seal are imposed following separate and independent procedures and that, in the event of an action against those two measures, each of them falls within the jurisdiction at first instance of different courts, namely the Rayonen sad (District Court) for the financial penalty and the Administrativen sad (Administrative Court) for the sealing measure, and that the Bulgarian procedural rules do not provide for the possibility of staying one set of proceedings until the conclusion of the other set of proceedings, with the result that there is no coordination mechanism between those proceedings. In addition, the referring court notes that although, in its judgment of 4 May 2023, MV – 98 (C‑97/21, EU:C:2023:371), the Court held that a coercive administrative measure involving sealing is of a criminal and punitive nature, the referring court is of the view that, in the present case, the preventive nature outweighs the punitive nature of that measure, which is intended only to limit the extent of the harmful consequences to the financial interests of the European Union.

24Lastly, that court considers that the reasoning in the judgment of 4 May 2023, MV – 98 (C‑97/21, EU:C:2023:371), cannot be applied, without infringing Article 325 TFEU and Article 273 of the VAT Directive, to the penalty imposed in respect of 85 separate offences, since the failure to specify individually such a penalty does not make it possible to ascertain whether the measures adopted have a genuinely deterrent effect and offer effective protection in order to ensure the recovery of the exact amount of VAT evaded and to prevent tax avoidance.

25In those circumstances, the Administrativen sad Burgas (Administrative Court, Burgas) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Are Article 325 [TFEU], Article 273 of [the VAT Directive] and Article 50 of the [Charter] to be interpreted as permitting national legislation under which a single overall measure of “sealing business premises and prohibiting access thereto” may be imposed in respect of multiple failures to fulfil tax obligations, where that measure is aimed exclusively at limiting the adverse effects of the offence, including the extent of the damage to the financial interests of the European Union, but not at punishing the offender, without that measure limiting the possibility of pursuing against that offender, in respect of each of those failures to fulfil tax obligations, independent proceedings of a punitive nature imposing on the taxable person a measure in the form of a financial penalty, it being the duty of the national court to examine and determine in each individual case which of the two objectives is pursued by the coercive administrative measure of “sealing business premises and prohibiting access thereto” imposed at an earlier stage: prevention and restriction or punishment?

(2) Are Article 325 [TFEU], Article 273 of [the VAT Directive] and Article 49(3) of the [Charter] to be interpreted as precluding a regime of penalties such as those at issue in the main proceedings, which, irrespective of the nature and seriousness of the offences, provides for a significant lower limit for the penalty in the form of a financial penalty, without providing for the possibility of imposing a penalty below the minimum amount laid down in the law or of replacing that penalty with a more lenient one?

(3) Are Article 325 [TFEU], Article 273 of [the VAT Directive] and the first paragraph of Article 47, Article 48(1) and Article 49(3) of the [Charter] to be interpreted as precluding national legislation which allows, in respect of multiple failures to fulfil tax obligations, the imposition of a single overall measure of “sealing business premises and prohibiting access thereto” and – before that measure becomes final – its provisional enforcement, without giving the court and the offender itself the opportunity to review the proportionality of that measure in relation to the seriousness of each individual administrative offence?’

Consideration of the questions referred

Admissibility

26According to the Bulgarian Government, the first and third questions are inadmissible because they bear no relation to the subject matter of the dispute in the main proceedings in so far as they concern the imposition of a coercive administrative measure. The referring court does not need the requested interpretation in order to resolve the dispute before it.

27Furthermore, Beach and bar management submits that the third question is inadmissible, since an action against a coercive administrative measure has not been brought before the referring court.

28The Commission, for its part, considers that the first question could be rephrased to render it admissible, which is not the case for the third question.

29In that regard, it is clear from the Court’s settled case-law that questions on the interpretation of EU law referred by a national court, in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling from a national court only where it is quite obvious that the interpretation of EU law sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 8 May 2025, Stadt Wuppertal, C‑130/24, EU:C:2025:340, paragraph 42 and the case-law cited).

30In the present case, it is apparent from the request for a preliminary ruling that the dispute in the main proceedings does not concern an action against the sealing of the business premises at issue, which constitutes a coercive administrative measure. Consequently, the third question referred for a preliminary ruling must be declared manifestly inadmissible, since it bears no relation to the subject matter of the dispute in the main proceedings.

31In addition, as the Advocate General observed in point 37 of his Opinion, it is apparent from that request for a preliminary ruling that, by its first question, the referring court seeks, in essence, to determine whether the financial penalties at issue in the main proceedings comply with EU law and that that question clearly concerns the interpretation of provisions of EU law. Thus reformulated, the first question must be considered to be admissible.

The first question

32By the first question, the referring court asks, in essence, whether Article 325 TFEU, Article 273 of the VAT Directive and Article 50 of the Charter must be interpreted as precluding national legislation which provides for the imposition of a financial penalty on a taxable person on the ground that he or she has not issued fiscal cash register receipts relating to sales made where that offence has already given rise to the imposition of a coercive administrative measure to seal the business premises in which that offence was committed and prohibiting access thereto.

33As regards the assessment as to whether the proceedings and penalties under Article 50 of the Charter are criminal in nature, it must be noted that, according to the Court’s settled case-law, three criteria are relevant. The first is the legal classification of the offence under national law, the second concerns the intrinsic nature of the offence, and the third relates to the degree of severity of the penalty which the person concerned is liable to incur (judgment of 4 May 2023, MV – 98, C‑97/21, EU:C:2023:371, paragraph 38 and the case-law cited).

34Nevertheless, the application of Article 50 of the Charter is not limited to proceedings and penalties which are classified as ‘criminal’ by national law, but extends, irrespective of such a classification under domestic law, to proceedings and penalties which must be considered to have a criminal nature on the basis of the two other criteria referred to in paragraph 33 of the present judgment. The intrinsic nature of the offence in question and the degree of severity of the penalties which it is liable to entail may result in its being criminal in nature (judgment of 4 May 2023, MV – 98, C‑97/21, EU:C:2023:371, paragraph 41 and the case-law cited).

35In the present case, it should be borne in mind, at the outset, that a placing under seal for a period of 30 days could, particularly for an individual trader who has only one set of business premises, be categorised as severe, especially, since it prevents him or her from carrying on his or her business, thus depriving him or her of his or her income (see, to that effect, judgment of 4 May 2023, MV – 98, C‑97/21, EU:C:2023:371, paragraph 47).

36As regards the financial penalty, first, the fact that the amount thereof, in respect of a first offence, cannot be less than BGN 500 (approximately EUR 250) and may be as high as BGN 2 000 (approximately EUR 1000) and, secondly, the fact that the relationship between the VAT evaded on account of the failure to issue fiscal cash register receipts in respect of all payments corresponding to the offences at issue in the main proceedings, namely a total amount of BGN 268.02 (approximately EUR 134), and the penalty imposed, which, according to the information provided by the referring court, amounts to BGN 42 500 (approximately EUR 21 250), seems particularly high, attest to the severe nature of that penalty (see, to that effect, judgment of 4 May 2023, MV – 98, C‑97/21, EU:C:2023:371, paragraph 48).

37In that context, since the financial penalties at issue must be classified as penalties of a criminal nature, the cumulation of those penalties must be regarded as entailing a limitation of the fundamental right guaranteed in Article 50 of the Charter (see, to that effect, judgment of 4 May 2023, MV – 98, C‑97/21, EU:C:2023:371, paragraph 49).

38The Court has held that Article 273 of the VAT Directive and Article 50 of the Charter must be interpreted as precluding national legislation under which a financial penalty and a measure involving sealing of business premises may be imposed on a taxpayer for one and the same offence relating to a tax obligation at the end of separate and autonomous procedures, where those measures are liable to challenge before different courts and where that legislation does not ensure coordination of the procedures enabling the additional disadvantage associated with the cumulation of those measures to be reduced to what is strictly necessary and does not ensure that the severity of all penalties imposed is commensurate with the seriousness of the offence concerned (judgment of 4 May 2023, MV – 98, C‑97/21, EU:C:2023:371, paragraph 63).

39According to the referring court, the approach adopted in the judgment of 4 May 2023, MV – 98 (C‑97/21, EU:C:2023:371), is not necessarily applicable to the circumstances of the case in the main proceedings, since, in the present case, a single coercive administrative measure penalises 85 separate offences. In the light of the repetitive, or even ‘systematic’, nature of the conduct penalised, that measure is intended only to limit the extent of the consequences harmful to the financial interests of the European Union, with the result that its preventive nature could outweigh its punitive nature.

40It must be stated, however, that, as the Advocate General observed in point 63 of his Opinion, that assessment by the referring court cannot be accepted, since the preventive aspect of the sealing measure of the business premises at issue in the main proceedings does not apply in such a way as to outweigh the punitive aspect of that measure.

41In that regard, it should be stated that the situation at issue in the main proceedings falls within the principle that the mere fact that a penalty with a punitive purpose also pursues a preventive purpose does not mean that it cannot be characterised as a criminal penalty within the meaning of Article 50 of the Charter (see, to that effect, judgment of 20 March 2018, Menci, C‑524/15, EU:C:2018:197, paragraph 31).

42In the light of the finding in paragraph 40 above, it follows that the coercive administrative measure at issue in the case in the main proceedings does not lose its classification as a criminal penalty within the meaning of that provision by the mere fact that it also has a preventive purpose.

43In any event, as recalled in paragraph 34 above, it is the inherent severity of the measure placing commercial premises under seal which justifies its criminal classification and leads to the applicability of Article 50 of the Charter. That severity is not qualified by the fact that, as the Advocate General observed in points 61 and 64 of his Opinion, the large number of offences committed in the present case could even have led to a considerably longer period of sealing being applied to the commercial premises at issue in the main proceedings.

44As a consequence, it must be held that the administrative measure involving the sealing of a business premises and prohibiting access thereto for a period of 14 days retains its punitive nature, whether imposed in response to a single specific offence under the Law on VAT or on account of the commission, during a specified period, of 85 offences under that law, taken as a whole.

45In the light of the foregoing considerations, the answer to the first question is that Article 325 TFEU, Article 273 of the VAT Directive and Article 50 of the Charter must be interpreted as precluding national legislation which provides for the imposition of a financial penalty on a taxable person on the ground that he or she has not issued fiscal cash register receipts relating to sales made where that offence has already given rise to the imposition of a coercive administrative measure to seal the business premises in which that offence was committed and prohibiting access thereto.

The second question

46By its second question, the referring court asks, in essence, whether Article 273 of the VAT Directive and Article 49(3) of the Charter must be interpreted as precluding national legislation which provides for, as an administrative penalty, a financial measure of a high amount without the court hearing a challenge to that measure having the procedural possibility of imposing an amount less than that provided for by that legislation or another more lenient type of penalty.

47In that regard, it must be borne in mind that, in accordance with Article 49(3) of the Charter, the severity of penalties must not be disproportionate to the offence. Similarly, the Court held that, in the absence of EU legislation in the field of the sanctions applicable, the Member States have the power to determine the nature and level of those penalties, subject, inter alia, to the principle of proportionality (judgment of 19 October 2023, G. ST. T. (Proportionality of the penalty for trade mark infringement), C‑655/21, EU:C:2023:791, paragraph 64 and the case-law cited).

48According to the Court’s case-law, in accordance with that principle, the punitive measures permitted under national legislation must not go beyond what is necessary in order to attain the objectives legitimately pursued by that legislation. The severity of the sanctions must be commensurate with the seriousness of the infringements for which they are imposed, in particular by ensuring a genuinely deterrent effect, while not going beyond what is necessary to attain that objective (judgment of 19 October 2023, G. ST. T. (Proportionality of the penalty for trade mark infringement), C‑655/21, EU:C:2023:791, paragraph 65 and the case-law cited).

49Furthermore, the principle of proportionality requires that the individual circumstances of the particular case are taken into account in determining the penalty and fixing the amount of the fine (judgment of 19 October 2023, G. ST. T. (Proportionality of the penalty for trade mark infringement), C‑655/21, EU:C:2023:791, paragraph 67).

50In order to assess the proportionality of penalties, account must be also be taken of the possibility for national courts to amend the categorisation as set out in the bill of indictment, that possibility being capable of leading to a less severe penalty, and of the possibility to vary the penalty depending on the seriousness of the offence identified (judgment of 19 October 2023, G. ST. T. (Proportionality of the penalty for trade mark infringement), C‑655/21, EU:C:2023:791, paragraph 68 and the case-law cited).

51Subject to verification by the referring court, there appears to be no possibility of amending the classification of the offence concerned in the legislation at issue in the main proceedings.

52In addition, having regard to the fact that the amount of the financial penalty for a first offence cannot, under that legislation, be less than BGN 500 (approximately EUR 250) and that that amount is almost 200 times higher than the amount of the VAT evaded for each infringement committed in the present case, namely BGN 2.70 (approximately EUR 1.35), it seems extremely difficult to set a penalty with a degree of severity that does not exceed the seriousness of the offence identified.

53In the light of the foregoing considerations, the answer to the second question is that Article 273 of the VAT Directive and Article 49(3) of the Charter must be interpreted as precluding national legislation which provides for, as an administrative penalty, a financial measure of a high amount without the court hearing a challenge to that measure having the procedural possibility of imposing an amount less than that provided for by that legislation or another more lenient type of penalty.

Costs

54Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (First Chamber) hereby rules:

1. Article 325 TFEU, Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, and Article 50 of the Charter of Fundamental Rights of the European Union

must be interpreted as precluding national legislation which provides for the imposition of a financial penalty on a taxable person on the ground that he or she has not issued fiscal cash register receipts relating to sales made where that offence has already given rise to the imposition of a coercive administrative measure to seal the business premises in which that offence was committed and prohibiting access thereto.

2. Article 273 of Directive 2006/112 and Article 49(3) of the Charter of Fundamental Rights

must be interpreted as precluding national legislation which provides for, as an administrative penalty, a financial measure of a high amount without the court hearing a challenge to that measure having the procedural possibility of imposing an amount less than that provided for by that legislation or another more lenient type of penalty.

Signatures

[Signatures]

Notes

* Language of the case: Bulgarian.

OPINION OF ADVOCATE GENERAL

CAMPOS SÁNCHEZ-BORDONA

delivered on 13 February 2025 ¹

(Reference for a preliminary ruling – Common system of value added tax (VAT) – Directive 2006/112/EC – Article 273 – Charter of Fundamental Rights of the European Union – Article 50 – Principle ne bis in idem – Failure to fulfil the obligation to issue a cash register receipt – Sealing of premises – Cumulation of penalties for the same offence – Principle of proportionality)

1The dispute giving rise to this reference for a preliminary ruling concerns the lawfulness of 85 financial penalties which the Bulgarian tax authorities imposed on a company for the same number of offences against the national law on value added tax (VAT).

2The financial penalties at issue may, in the abstract, be classified as measures to ensure the correct collection of VAT and to prevent evasion (Article 273 of Directive 2006/112/EC). ²

3The tax authorities, in addition to imposing those penalties on the undertaking in question, ordered that the business premises on which the offences had been committed be sealed. Unlike in Ati-19, ³ the reference for a preliminary ruling in this case does not contain a question on the sealing measure itself.

4The referring court wishes to ascertain, in essence, whether national legislation which allows financial penalties to be imposed for offences for which a sealing measure has already been implemented is compatible with Article 50 of the Charter of Fundamental Rights of the European Union (‘the Charter’).

I. Legislative framework

A. European Union law. VAT Directive

5Pursuant to Article 2(1)(a), ‘the supply of goods for consideration within the territory of a Member State by a taxable person acting as such’ is to be subject to VAT.

6Article 273 provides:

‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.

The option under the first paragraph may not be relied upon in order to impose additional invoicing obligations over and above those laid down in Chapter 3.’

B. National law

1. Law on VAT ⁴

7Article 118(1), in the version applicable to the facts of the dispute, states:

‘Any person, whether registered or not under this Law, is obliged to register and record in writing the supplies and sales made by him or her on business premises by issuing a fiscal cash register receipt generated by a fiscal memory device (cash register receipt) or a cash register receipt generated by an automatic integrated business management system (system receipt), irrespective of whether or not another fiscal receipt is requested. The recipients must receive the cash register receipt or the system receipt and keep it until he or she has left the premises.’

8Article 185(1) and (2) provides:

‘(1) Failure to issue a supporting document as referred to in Article 118(1) shall, for natural persons who are not traders, be punishable by a fine of between 100 and 500 leva (BGN) and, for legal persons and individual traders, by a financial penalty of between BGN 500 and BGN 2000.

(2) Other than in the cases referred to in paragraph 1, any person who commits or permits the commission of an offence under Article 118 or under a provision implementing that article shall be liable to a fine of between BGN 300 and BGN 1000, in the case of natural persons who are not traders, or to a financial penalty of between BGN 3000 and BGN 10000, for legal persons and individual traders. Where that offence does not result in a failure to declare tax revenue, the penalties provided for in paragraph 1 shall be imposed.’

9Article 186 of the Law on VAT states:

‘(1) The coercive administrative measure of sealing business premises for a maximum period of 30 days shall be ordered, irrespective of the fines or financial penalties provided for, against any person who:

1. omits to

(а) issue the receipt document evidencing the relevant sale in accordance with the Article 118;

…

(3) The coercive administrative measure laid down in paragraph 1 shall be applied by means of a reasoned order issued by the [tax revenue] collection department or by an official authorised by that department.

(4) An appeal shall lie against the order referred to in paragraph 3 in accordance with the procedure laid down in the Code of Administrative Procedure.’

10According to Article 187(1) and (4):

‘(1) Where a coercive administrative measure is ordered pursuant to Article 186(1), access to the person’s business premises shall also be prohibited and the property present in those premises and in the adjoining storage facilities shall be removed by the person or by his or her authorised representative. …

…

(4) At the request of the offender and subject to his or her providing proof of full payment of the fine or financial penalty, the authority shall terminate the coercive administrative measure imposed by it. The removal of seals shall be subject to an obligation of cooperation on the part of the offender. In the event of a repeat offence, removal of the seals from the premises shall not be permitted until one month has elapsed since its placing under seal.’

11Article 188 ⁵ states:

‘(1) ‘The coercive administrative measure referred to in Article 186(1) shall be provisionally enforceable under the conditions laid down in Article 60(1) to (7) of the Code of Administrative Procedure.

(2) No appeal shall lie against the decision of the court.’

12Article 193 states:

‘(1) The Law on administrative offences and penalties shall govern the establishment of offences under this Law and under the legislative acts implementing it, the adoption and enforcement of decisions imposing administrative penalties, and any appeals that lie against such decisions.

(2) Findings of offences shall be made by the [tax revenue] collection departments and the decisions imposing administrative penalties shall be adopted by the Executive Director of the National Revenue Agency or by the official authorised by him or her for that purpose.’

2. Code of Administrative Procedure ⁶

13Under Article 6(5), in the version applicable to the facts of the dispute, the administrative authorities must refrain from adopting acts and engaging in conduct liable to cause damage which is manifestly disproportionate to the aim pursued.

14Article 60 states:

‘(1) The administrative act shall include an order for its provisional enforcement, where this is required by the life or health of citizens, so as to protect particularly important State or public interests, where enforcement of the decision is liable to be prevented or significantly impeded, or if the delay in enforcement is likely to cause damage which is serious or reparable only with difficulty, or even at the request of one of the parties, to protect an interest of particular importance to that party. In the latter case, the administrative authority shall require the corresponding guarantee.

(2) The provisional enforcement order must state the reasons on which it is based.

…

(5) The order authorising or refusing provisional enforcement shall be open to appeal, through the administrative authority before the court within three days of notification of the order, irrespective of whether or not an appeal has been lodged against the administrative act.

(6) The appeal shall be examined as soon as possible in chamber, without notification of copies of the appeal to the parties. The appeal shall not suspend provisional enforcement, but the court may suspend provisional enforcement until it has given a final ruling on the appeal.

(7) When annulling the order under appeal, the court shall rule on the substance of the case. If provisional enforcement is annulled, the administrative authority shall restore the pre-enforcement situation.

(8) An appeal may be brought against the order of the court.’

15Under point 1 of Article 128(1), the administrative courts have jurisdiction to hear and determine cases seeking, inter alia, the amendment or annulment of administrative acts.

16Article 166 states:

‘(1) An appeal [before the courts] shall suspend enforcement of the administrative act.

(2) At each stage of the proceedings until the judgment becomes final, the court may, at the request of the applicant, suspend provisional enforcement, authorised by a final order of the authority which adopted the act referred to in Article 60(1), if the provisional enforcement would be liable to cause the applicant damage which is serious or reparable only with difficulty. …’

3. Law on administrative offences and penalties ⁷

17Article 22 provides that coercive administrative measures may be applied to prevent and stop administrative offences and to prevent and eliminate their adverse consequences.

18Article 27(1), (2), (4) and (5) provides:

‘(1) The administrative penalty shall be determined in accordance with the provisions of this law within the limits laid down for the offence committed.

(2) In the determination of the penalty, account shall be taken of the severity of the offence, the reasons for its commission and other mitigating and aggravating circumstances, as well as the financial situation of the offender.

…

(4) Except in the cases provided for in Article 15(2), the penalties attached to offences may not be replaced by penalties of a lighter nature.

(5) Neither is it permissible to fix the penalty below the minimum penalty provided for, whether this be a fine or a temporary deprivation of the right to pursue a particular occupation or activity, except in cases provided for by law.’

19In accordance with Article 59, punitive administrative measures are actionable before the Rayonen sad (District Court, Bulgaria) within 14 days of notification thereof.

II. Facts, dispute and question referred for a preliminary ruling

20‘Beach and bar management’ EOOD (‘Beach and bar’) is a limited liability company which operates business premises (a bar and restaurant).

21On 4 August 2022, the Bulgarian tax authorities ⁸ carried out an inspection at the Beach and bar business premises in the course of which:

it established the existence of two POS terminals and 85 receipts for debit and credit card payments made during the period from 25 June 2022 to 26 July 2022;

it established that the undertaking in question had not issued any fiscal cash register receipts for those 85 transactions.

22On 12 August 2022, the tax authority issued an order for the business premises to be sealed and for access to them to be prohibited for a period of 14 days. By separate decision, it authorised the provisional enforcement of both measures.

23The sealing measure and the authorisation for its provisional enforcement were each unsuccessfully challenged in separate proceedings before the Administrativen sad – Burgas (Administrative Court, Burgas, Bulgaria).

24The administrative authority, considering the facts to have been proved, adopted 85 punitive decisions. ⁹ In each one of them, it imposed on Beach and bar a fine of BGN 500 (approximately EUR 250), bringing the penalty for all 85 offences to BGN 42500 (approximately EUR 21250).

25The amount of VAT not registered (on account of the failure to issue the cash register fiscal receipts for the 85 payment transactions) amounts to BGN 268.02 (approximately EUR 134).

26The 85 punitive decisions were challenged before the Rayonen sad – Burgas (District Court, Burgas) in the same number of sets of proceedings culminating in judgments dismissing the actions brought against them.

27The judgments of the court of first instance were appealed to the Administrativen sad – Burgas (Administrative Court, Burgas), which has referred three questions to the Court of Justice for a preliminary ruling, of which I shall reproduce only the first:

Are Article 325 [TFEU], Article 273 of the [VAT] Directive and Article 50 of the Charter … to be interpreted as permitting national legislation under which a single overall measure of “sealing business premises and prohibiting access thereto” may be imposed in respect of multiple failures to fulfil tax obligations, where that measure is aimed exclusively at limiting the adverse effects of the offence, including the extent of the damage to the financial interests of the European Union, but not at punishing the offender, without that measure limiting the possibility of pursuing against that offender, in respect of each of those failures to fulfil tax obligations, independent proceedings of a punitive nature imposing on the taxable person a measure in the form of a financial penalty, it being the duty of the national court to examine and determine in each individual case which of the two objectives is pursued by the coercive administrative measure of “sealing business premises and prohibiting access thereto” imposed at an earlier stage: prevention and restriction or punishment?’

III. Procedure before the Court of Justice

28The request for a preliminary ruling was registered at the Court of Justice on 1 December 2023.

29Written observations have been submitted by Beach and bar, the Bulgarian Government and the European Commission.

30The Court did not consider it necessary to hold a public hearing.

31At the Court’s direction, I shall confine my Opinion to the first of the questions referred for a preliminary ruling.

IV. Analysis

A. Admissibility

32As has already been noted, the referring has before it 85 financial penalties imposed on Beach and bar for the same number of offences against the Law on VAT. Those offences also resulted in the imposition of a measure involving the sealing of the business premises in question (and the prohibition of access to them) for a period of 14 days.

33By the time the proceedings against the financial penalties had reached the oral stage, the sealing measure against which Beach and bar had unsuccessfully brought an action in separate proceedings had already been implemented.

34In that context, the Bulgarian Government considers that the first question referred for a preliminary ruling is inadmissible, since the dispute giving rise to the reference for a preliminary ruling is exclusively concerned with the financial penalties and may be disposed of without the need to establish the compatibility of EU law with the national rules which made it possible to adopt the already implemented sealing measure, which does not form part of the main proceedings.

35The Commission shares the Bulgarian Government’s view, although it proposes that the question be redrafted in such a way as to allow the Court to rule on the substance. ¹⁰

36In my opinion, it is inappropriate for the Court of Justice, when replying to the referring court, to rule on the compatibility of EU law with the national legislation governing the sealing of business premises, ¹¹ when the sealing measure is not being challenged in the main proceedings.

37However, the referring court’s question is in actual fact aimed not so much at determining whether the rules on sealing are in conformity with EU law, but rather that of the financial penalties at issue. In saying as much, the rewording proposal suggested by the Commission may be accepted.

38The task, then, is not to examine whether EU law is compatible with the measure of sealing business premises but to determine whether it precludes a financial penalty imposed on the same person for the same acts as those for which the sealing was ordered.

B. The substance

1. Impact of the judgment of 4 May 2023 in MV – 98 ¹²

39In the judgment in MV – 98, the Court has already ruled on the compatibility of the national legislation applied in that case with Article 50 of the Charter.

40In MV – 98, the facts were (with the exception which I shall mention later) similar to those in this case: during an inspection carried out at business premises, the Bulgarian tax authorities found that MV – 98 had failed to record the sale of an item and to issue the fiscal cash register receipt relating to that sale.

41On the basis of those facts, the tax authorities, in essence, took the following steps:

In accordance with Article 185 of the Law on VAT, it imposed a financial penalty on MV – 98.

Pursuant to Article 186 of that law, it adopted an administrative measure involving the sealing of the premises in question for a period of 14 days.

By order issued under Article 60 of the CAP, it authorised the provisional enforcement of that measure.

42On that occasion, it was necessary to determine, ‘… in essence, whether Article 273 of the VAT Directive and Article 50 of the Charter must be interpreted as precluding national legislation under which, for one and the same tax-related offence and as a result of separate, autonomous sets of proceedings, a financial penalty and a sealing of business premises, which measures may be challenged before different courts, may be imposed on a taxpayer.’ ¹³

43The Court turned first of all to an analysis of the ‘criminal nature of the measures at issue in the main proceedings’ (paragraphs 38 to 49 of the judgment in MV – 98), as being an essential condition for determining the applicability of Article 50 of the Charter.

44From an analysis of the three criteria relevant to that assessment, the Court concluded, in relation to the sealing measure, that:

The fact that that measure is classified in national law as an administrative measure does not mean that it cannot be recognised as being of a criminal nature (paragraphs 38 to 41 of the judgment in MV – 98).

That measure simultaneously pursues the objectives of deterring and punishing VAT-related offences. Its purpose is not merely precautionary, as some of the governments intervening in that case had alleged (paragraphs 42 to 44 of the judgment in MV – 98).

The sealing measure appears to be of high severity (paragraphs 45 to 47 of the judgment in MV – 98).

45In that context, the Court held that, ‘if, as is apparent from the information provided by the referring court, the measures at issue in the main proceedings must be classified as penalties of a criminal nature, the cumulation of those penalties must be regarded as entailing a limitation of the fundamental right guaranteed in Article 50 of the Charter.’ ¹⁴

46The Court’s subsequent reasoning in the judgment in MV – 98 centred on whether there was any justification for the limitation of the fundamental right guaranteed in Article 50 of the Charter.

47At the end of that reasoning, the Court held that ‘Article 273 of [the VAT Directive] and Article 50 of the [Charter] must be interpreted as precluding national legislation under which a financial penalty and a measure involving sealing of business premises may be imposed on a taxpayer for one and the same offence relating to a tax obligation at the end of separate and autonomous procedures, where those measures are liable to challenge before different courts, and where that legislation does not ensure coordination of the procedures enabling the additional disadvantage associated with the cumulation of those measures to be reduced to what is strictly necessary, and does not ensure that the severity of all penalties imposed is commensurate with the seriousness of the offence concerned.’ ¹⁵

2. Difference between this case and MV – 98

48As the referring court notes, this case differs from that examined by the judgment in MV – 98 in one very specific respect: the latter case concerned a single offence which had given rise to one sealing measure and one financial penalty, whereas, in this case, there are 85 offences in dispute and 85 financial penalties have been imposed, although only one sealing measure has been imposed for all of those offences. ¹⁶

49That difference prompts the referring court to question the Court of Justice about the scope of its findings in the judgment in MV – 98 with respect to the criminal nature of the sealing measure. More specifically, about the preventive or punitive purpose of that measure as a determining factor in its characterisation as criminal.

50The referring court’s position is, in essence, as follows:

If we leave aside that particular difference, the other conditions necessary to any finding as to the existence of the cumulation of procedures and penalties proscribed by Article 50 of the Charter, that is to say that the facts and the penalties must be identical, are met in this case.

However, the fact that only one measure involving the sealing of premises was adopted for all 85 tax offences casts doubt as to the criminal nature of that measure. ¹⁷

51In a not so particularly clear fashion, the referring court notes that the fact that the sealing measure is not individualised would indicate that its purpose of limiting the extent of the damage caused to the interests of the European Union (and, therefore, its preventive dimension) prevails over its punitive nature. ¹⁸ If this were an indication that sealing does not constitute a genuine criminal sanction, one of the conditions necessary for applying Article 50 of the Charter would be lacking.

3. My assessment

52I believe that the answer to the issue thus raised by the referring court can be found, without too much interpretative difficulty, in the judgment in MV – 98 and in the case-law of the Court, in particular, the judgment in Menci. ¹⁹

53Thus, ‘a penalty with a punitive purpose is criminal in nature for the purposes of Article 50 of the Charter, and … the mere fact that it also pursues a deterrence purpose does not mean that it cannot be characterised as a criminal penalty’. ²⁰

54As the judgment in MV – 98 made clear, on the basis of the information provided by the referring court, ‘… Article 22 of the Law on administrative offences and penalties [shows that the sealing measure] is intended to bring to an end administrative offences committed and to prevent further offences by preventing the trader concerned from operating his or her business premises. In that regard, the referring court states that the sealing measure pursues both a preventive and a punitive purpose, in so far as it also seeks to deter the persons concerned from failing to comply with the obligation laid down in Article 118(1) of the Law on VAT.’ ²¹

55The consequences which the Court inferred from that premiss in the judgment in MV – 98 can be extended to a situation such as that in this case: the considerations with respect to the application of Article 50 of the Charter that obtain in the case where a single sealing measure accompany a single financial penalty, both relating to a single offence, also hold good in the case where the second term of that equation is not one but 85 financial penalties.

56The referring court does not rule out the possibility that the sealing measure is devoid of punitive content. It considers, however, that, given the generic rather than individualised nature of that measure, its preventive function prevails over its punitive purpose to such an extent as to dissolve its criminal nature.

57In my view, as I maintained in my Opinion in Menci, ‘it would be difficult to deny that provisions of tax law providing for penalties are aimed at punishing taxable persons whose frauds have been detected while at the same time serving as a warning or deterrent to others, in order to prevent those persons from giving in to the temptation of not paying their taxes’. ²²

58In any event, in the view of the Court, ‘it is of the very nature of criminal penalties that they seek both to punish and to deter unlawful conduct’. ²³

59The sealing of premises logically prevents business from being conducted there and has the effect of depriving the person concerned of his or her income. Where, as is the case here, that measure is adopted not on health or similar grounds, ²⁴ but on account of the mere commission of tax offences, the punitive (and adverse) component of the measure seems to me to be undeniable. ²⁵

60From that point of view, the punitive function of a measure such as the sealing of premises does not depend on whether it is commensurate with the higher or lower number of offences for which it is intended to serve as punishment. I concur in this assessment with the Commission, for which the existence of a punitive purpose does not depend on whether the measure in question is applied to one or more cumulated offences. ²⁶

61If the logic which appears to inform the referring court’s thinking is followed, the sealing measure provided for in Article 186 of the Law on VAT would be of a punitive and, therefore, materially criminal nature only if it had been imposed for each and every one of the 85 offences at issue, thus potentially resulting in the business premises being closed for up to 2 550 days in total.

62That clearly disproportionate inference should not, in my opinion, be accepted. Obviously, any sealing ordered on that basis would be much more severe from the point of view of its punitive nature, since it would mean closing the business premises for years. However, its punitive nature is still present if the sealing, albeit manifestly less onerous, inflicts on the person concerned the damage attendant upon the impossibility of carrying on his or her business for 14 days, and upon the economic losses that this entails. ²⁷

63To my mind, the preventive aspect of the sealing measure is not so dominant in cases such as this as to outweigh its punitive aspect by diluting it.

64What happened in this case was that the tax authority assumed the existence of a combination of offences as the basis for imposing only one measure involving the sealing of business premises, rather than 85. It could perhaps have been more rigorous by raising the (single) closure period to the maximum of 30 days permitted under Article 186(1) of the Law on VAT, but this is a matter for the tax authority alone.

65In short, the findings reached by the Court in the judgment in MV – 98 with respect to the materially criminal nature of a measure involving the sealing of business premises for a period of 14 days that was ordered in response to a single tax offence are fully applicable in the case where that measure is adopted in joint response to a total of 85 cumulated offences.

66That being so, the answer to the first question referred for a preliminary ruling must be that the administrative measure involving the sealing of, and the prohibition of access to, business premises for 14 days retains its punitive nature whether ordered in response to a single offence against the Law on VAT or on account of the commission over a particular period of time of 85 offences against that Law, considered in their entirety.

V. Conclusion

Conclusion

67In the light of the foregoing, I propose that the Court reply to the Аdministrativen sad – Burgas (Administrative Court, Burgas, Bulgaria) as follows:

‘Article 325 TFEU, Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and Article 50 of the Charter of Fundamental Rights of the European Union

must be interpreted as meaning that the considerations in the light of which the Court of Justice delivered the judgment of 24 May 2023, MV – 98 (C‑97/21, EU:C:2023:371), may be extended to a situation in which the national tax authority imposes 85 financial penalties on a taxpayer for successive failures to fulfil his or her obligations in respect of value added tax, while at the same time ordering a measure involving the sealing of, and the prohibition of access to, business premises for 14 days on account of the entirety of the tax offences committed.’

¹ Original language: Spanish.

² Council Directive of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’).

³ In which I am also delivering my Opinion today (C‑605/23).

⁴ Zakon za danak varhu dobavenata stoynost (Law on value added tax) of 21 July 2006 (DV No 63 of 4 August 2006, p. 8; ‘the Law on VAT’).

⁵ In the version applicable to this case, as amended and published in DV No 100 of 20 December 2019.

⁶ Administrativnoprotsetsualen kodeks (Code of Administrative Procedure) (DV No 30 of 11 April 2006; ‘the CAP’).

⁷ Zakon za administrativnite narushenia i nakazania (Law on administrative offences and penalties) (DV No 92 of 28 November 1969), in the version applicable to the facts of the dispute.

⁸ The operation was carried out by the Glavna direktsia ‘Fiskalen kontrol’ (‘Tax Inspection’ General Directorate).

⁹ The judicial decisions adopted in the disputes concerning the sealing and its enforcement were already final at the time when the hearing in the proceedings for challenging the financial penalties was held.

¹⁰ Paragraphs 30 to 32 of the Commission’s written observations. In those paragraphs, the Commission suggests that the question be redrafted so that it can be decided whether it is contrary to EU law for a financial penalty to be imposed for acts such as those at issue, given that the offence for which that financial penalty is punishable has already been the subject of an administrative sealing measure imposed for the same acts.

¹¹ That compatibility is the subject of Case C‑605/23, Ati-19.

¹² Case C‑97/21 (EU:C:2023:371; ‘the judgment in MV – 98’).

¹³ The judgment in MV – 98, paragraph 27.

¹⁴ The judgment in MV – 98, paragraph 49.

¹⁵ The judgment in MV – 98, paragraph 63.

¹⁶ Paragraph 32 of the order for reference.

¹⁷ Paragraph 43 of the order for reference.

¹⁸ Paragraph 47 of the order for reference: ‘Considered as a whole, all of the circumstances of the present case, as described, might give the impression that, in a case such as that in the main proceedings, in which a coercive administrative measure was imposed in respect of 85 offences considered as a whole but the extent to which that measure is ordered in respect of each particular offence is not individualised, the safeguarding function of the coercive administrative measure, which restricts the amount of unregistered and uncharged VAT to that in the original findings, does not simply prevail over its punitive nature, but is in practice the only form of coercive administrative measure in the main proceedings as specifically described, and is aimed exclusively at limiting the extent of the damage to the financial interests of the European Union’.

¹⁹ Judgment of 20 March 2018, Menci (C‑524/15, EU:C:2018:197; ‘the judgment in Menci’).

²⁰ The judgment in Menci, paragraph 31. See, to that effect, judgment in MV – 98, paragraph 42.

²¹ The judgment in MV – 98, paragraph 44.

²² Opinion in Menci (C‑524/15, EU:C:2017:667, point 113). I went on to say there (footnote 99) that ‘the academic (sometimes philosophical) debate concerning the basis, justification and aim, or aims, of punishment has lasted for centuries and involves differing theories, some of which place the emphasis on its retributive aspects and others on its preventive (general prevention or special prevention) or deterrent effects’.

²³ The judgment in MV – 98, paragraph 42.

²⁴ I am not saying that it is not possible that the sealing of business premises may be ordered on grounds which are purely and exclusively preventive, for example, because of the existence of imminent and serious risks to public health. In those cases, which are devoid of any punitive connotation, the element of punishment that characterises any penalty would be lacking.

²⁵ The Court has also recognised the severe nature of a sealing measure which, although it could have been imposed for 30 days was, in that case as in this, imposed for 14. The judgment in MV – 98, paragraph 47.

²⁶ Paragraph 43 of the Commission’s written observations.

²⁷ As the Commission has observed, the administrative closure of business premises, even for a short period, may represent a more severe penalty for the trader than a fine (paragraph 46 of its written observations).