When tax payable and when assessee deemed in default.

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.... served upon an assessee and any appeal or other proceeding, as the case may be, is filed or initiated in respect of the amount specified in the said notice of demand, then-- (a) such demand shall be deemed to be valid till the disposal of the appeal by the last appellate authority or disposal of the proceedings; and (b) any such notice of demand shall have the effect as specified in section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 (11 of 1964). (3) If the amount specified in any notice of demand under section 289 is not paid within the period limited under sub-section (1),-- (a) the assessee shall be liable to pay simple interest at 1% for every month or part of a month; and (b) such p....

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.... (ii) ending with the day on which the amount is paid. (7) In respect of any period commencing on or before the 31st March, 1989 and ending after that date, interest under sub-section (3) shall, in respect of so much of such period as falls after that date, be calculated at the rate of 1.5% for every month or part of a month. (8) Irrespective of the provisions contained in sub-section (3), the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, on an application by the assessee, reduce or waive the amount of interest paid or payable by an assessee under sub-section (3) if he is satisfied that- (a) payment of such amount has caused or would cause genuine hardship to the assessee; (b) defau....