“[74] We turn then to the question whether proportionality is to be assessed at a high level, that is to say whether it is correct to view the default surcharge regime as a whole, recognising the possibility of its producing, in some cases, a disproportionate and possibly entirely unfair result; or whether proportionality is to be assessed at an individual level by asking whether the penalty imposed on a particular taxpayer on the particular facts of its case is disproportionate.”
“Even if the structure of the surcharge regime is a rational response to the late filing of returns and the late payment of VAT, it is, nonetheless necessary to consider the effect of the regime on the particular case in hand. It is necessary to do so not least because … a penalty must not be disproportionate to the gravity of the infringement …” (3) This approach being suggested, as a point of law and consistent with other ECJ decisions, is binding on this Tribunal. In looking at the Surcharge, the Tribunal must therefore examine whether the measure in question and the manner in which it is applied by the taxing authority is proportionate. The Tribunal must therefore set aside the Surcharge if it decides that it is not proportionate. There is no power to vary the Surcharge. The Tribunal must also look to the particular taxpayer and determine whether the Surcharge is proportionate. This is borne out in the Greek case, where the Court explained that “the question whether the penalties applied are proportionate or disproportionate has to be assessed on the basis of the level of the penalties actually applied in the individual case”