As $f$ is cont., we see that $f(x+t)\rightarrow f(x)$ as $t\rightarrow 0$. So, we have
$$\lim_{t\rightarrow 0}\frac{(g\circ f)(x+t)-(g\circ f)(x)}{t}
=\lim_{f(x+t)\rightarrow f(x)}\frac{g(f(x+t))-g(f(x))}{t}$$
But, we don’t know what is this. Arrange this as,
$$\lim_{f(x+t)\rightarrow f(x)}\frac{g(f(x+t))-g(f(x))}{t}
=\lim_{f(x+t)\rightarrow f(x)}\frac{g(f(x+t))-g(f(x))}{f(x+t)-f(x)}\cdot\frac{f(x+t)-f(x)}{t}$$
Limit distributes in product (here) and so, we have
$$\lim_{f(x+t)\rightarrow f(x)}\frac{g(f(x+t))-g(f(x))}{f(x+t)-f(x)}\lim_{t\rightarrow 0}\frac{f(x+t)-f(x)}{t}=g’(f(x))f’(x)$$
So, the limit exists and so the composition $g\circ f$ is differentiable.
Suppose $g,f$ are smooth. It is clear that $g\circ f$ is differentiable.
$g’\circ f$ is differentiable being composition of differentiable functions.
As product of differentiable functions is a differentiable function, $(g’\circ f)\cdot f’$ is differentiable, that is, $(g\circ f)’$ is differentiable.
Similarly, we can prove every derivative of $g\circ f$ is differentiable, that is $g\circ f$ is smooth.