Appeal Competence and Limitation: appeal to the Assistant Commissioner available; delayed super-tax demand is unlawful and cannot be revived.

Appeal competence to the Assistant Commissioner exists where an assessee challenges liability to be assessed to super-tax in a different taxable capacity; the appellate provisions apply and the Assistant Commissioner's decision was a lawful appellate determination. A notice demanding super-tax must be served within a reasonable time and, while not required in the identical notice, should be issued about the same time as the ordinary income-tax demand; an excessive delay in issuing the super-tax demand renders it illegal. Cancellation of registration after the statutory period cannot lawfully revive or authorise a fresh super-tax demand. Costs awarded against the revenue party.

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Issues: (i) Whether the assessee (a firm assessed as a registered firm) had a competent right of appeal to the Assistant Commissioner against liability to be assessed to super-tax; (ii) Whether the Assistant Commissioner's appellate decision was a legal appellate decision under the Act; (iii) Whether the demand for super-tax (a) must be made within a reasonable time and (b) must be simultaneous or almost simultaneous with the demand for ordinary income-tax; and whether the Commissioner's cancellation of registration more than one year after the Income Tax Officer's order could validly authorise a fresh demand for super-tax.

Issue (i): Whether the assessee had a competent right of appeal to the Assistant Commissioner against liability to be assessed to super-tax.

Analysis: The Court examined Sections 30 and 58 (making Section 30 applicable to super-tax), the proviso to Section 30(1) which bars appeals in respect of assessments under Section 23(4), and the legislative scheme distinguishing classes of taxable persons and remedies. The proviso is penal in effect and must receive strict construction; an appeal contesting liability to be assessed in a different capacity (i.e., liability to super-tax despite recognition as a registered firm) falls within the rights conferred by Section 30(1) as applied by Section 58.

Conclusion: The appeal to the Assistant Commissioner was competent and available to the assessee (in favour of the assessee).

Issue (ii): Whether the Assistant Commissioner's appellate decision was a legal appellate decision under the Act.

Analysis: Given the competence of the appeal under Issue (i) and the applicability of the appellate provisions (including Section 31/35 as to appellate procedure), the Court considered whether the Assistant Commissioner lawfully heard and decided the appeal.

Conclusion: The Assistant Commissioner's decision was a legal appellate decision under the Act (in favour of the assessee on jurisdictional competence question).

Issue (iii): (a) Whether a notice demanding super-tax must be served within a reasonable time; (b) Whether the demand for super-tax must be made simultaneously or about the same time as the demand for ordinary income-tax; and whether the Commissioner could, by cancelling registration after more than one year, empower a fresh demand beyond limitation.

Analysis: The Court reviewed statutory scheme and authorities holding that, although Section 29 prescribes no express period, demands must be made within a reasonable time. The statutory form and practice indicate the demand for super-tax should be made at about the same time as the ordinary income-tax demand, though not necessarily in the identical notice. The Court further considered the temporal limits on review/cancellation powers, the proviso/limitations in Sections 34 and 35, and held that the Commissioner cannot, by a late cancellation of registration beyond the period permitted by the Act, lawfully permit a fresh demand after limitation has expired.

Conclusion: (a) A demand for super-tax must be served within a reasonable time and (b) the demand should be made about the same time as the ordinary income-tax demand; a delay of approximately two years and four months in issuing the super-tax demand rendered the demand illegal. The Commissioner's cancellation of registration more than one year after the Income Tax Officer's order did not validly empower a fresh demand beyond the statutory period (in favour of the assessee).

Final Conclusion: The Court allowed the applicants' challenge: the demand for super-tax made after an unreasonable delay was illegal, and the late cancellation of registration did not lawfully revive or authorise a fresh demand beyond the period permitted by the Act; costs were awarded against the Commissioner.

Ratio Decidendi: A notice demanding super-tax must be issued within a reasonable time and, though not required to be in the identical notice, should be made about the same time as the ordinary income-tax demand; a late cancellation of a previously recognized registration beyond the statutory period cannot be used to circumvent the limitation and validate a fresh demand for super-tax.

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