Continuing business doctrine defeats new-business treatment for excess profits tax, and consequential refund is not time-barred.

A refund of excess profits tax was held not to be barred by limitation where the claim was consequential to a Supreme Court decision and depended on giving effect to that ruling. On the merits, the Hindu undivided family's business was treated as continuing rather than commencing afresh, because one branch of the composite business had ceased while the money-lending activity continued in the same ownership. The cessation of part of the business did not amount to a change in ownership or a new business for excess profits tax purposes. The assessee was therefore entitled to have deficiency and excess profits worked out on the basis of a continuing business and to obtain the refund.

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Issues: Whether the assessee's claim for refund of excess profits tax was barred by limitation and whether, on the facts found, the assessee remained entitled to refund after the partial partition and the subsequent decision of the Supreme Court.

Analysis: The claim for refund did not fall within the limitation provision invoked by the taxing authority, because the refund sought was consequential to the Supreme Court's decision and required effect to be given to that decision. On the merits, the business of the Hindu undivided family did not cease so as to attract the provision dealing with commencement of a new business. The family continued to carry on money-lending business, and the cessation of one branch of business with continuation of the remaining business did not amount to a change in ownership. In those circumstances, the deficiency and excess profits had to be worked out on the footing that the business continued in a diminished form, entitling the assessee to relief.

Conclusion: The refund claim was not barred by limitation, and the assessee was entitled to refund of the disputed sum.

Ratio Decidendi: Where a composite business continues in the same ownership after one branch is dropped, the continuation is not treated as a new business for excess profits tax purposes, and a refund consequential upon a higher court's decision cannot be defeated by the limitation provision relied upon by the revenue.

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