Sections 38-39 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 38 of the Competition Act, 2002 allows the Commission to rectify a mistake apparent from the record in an order it has passed, but not to change the substantive part of the order. Section 39 deals with what happens when a monetary penalty imposed under the Act is not paid: the Commission recovers it in the manner specified by regulations, or may ask the income-tax authority to recover it as if it were tax due. The Competition (Amendment) Act, 2023 does not amend either section.
As per the consolidated text of the Act published by the Competition Commission of India (amendments shown up to the Finance Act, 2017), read with the Competition (Amendment) Act, 2023 as published in the Gazette of India on 11 April 2023. The Commission may amend an order to rectify a mistake apparent from the record, on its own motion or when a party brings it to notice, but not the substantive part of the order. If a person fails to pay a monetary penalty, the Commission proceeds to recover it in the manner specified by regulations, and may make a reference to the income-tax authority to recover it as tax due. The 2023 Act does not touch these sections.
Section 38: rectification of orders
Section 38(1) reads: "With a view to rectifying any mistake apparent from the record, the Commission may amend any order passed by it under the provisions of this Act."
Section 38(2) adds that, "Subject to the other provisions of this Act, the Commission may make— (a) an amendment under sub-section (1) of its own motion; (b) an amendment for rectifying any such mistake which has been brought to its notice by any party to the order."
The Explanation closes the door on wider changes: "For the removal of doubts, it is hereby declared that the Commission shall not, while rectifying any mistake apparent from record, amend substantive part of its order passed under the provisions of this Act." The consolidated text prints a double dash after "Explanation."; we read the Explanation as printed.
What this means in practice:
- The mistake must be apparent from the record. The text does not give examples such as a wrong name or an arithmetic error, and we add none.
- Two routes: the Commission's own motion, or a mistake brought to its notice by any party to the order.
- A limit: the substantive part of the order cannot be amended in this way.
Section 38 is separate from the appeal route. An order made under Section 27, for instance, is appealed under Section 53B (see our article on the appeal to the Appellate Tribunal), whereas Section 38 is limited to a mistake apparent from the record. If you think an order contains such a mistake, note the time limits for any appeal while you raise it; a legal dispute resolution review can help you decide which route fits the error.
Example. The Commission's order against Kailash Logistics Pvt Ltd names the company's registered office with a wrong city, and the penalty figure in the summary at the end does not match the figure in the body. A party to the order brings the discrepancy to the Commission's notice. Section 38(2)(b) allows the Commission to amend the order to correct the mistake, as long as it does not amend the substantive part of the order.
Section 39: execution of orders imposing monetary penalty
The consolidated text prints Section 39 in brackets under the heading "Execution of orders of Commission imposing monetary penalty", as substituted in 2007. The earlier form (footnote 65) provided for enforcement as a decree of a civil court; we mention that only as history.
Section 39(1): "If a person fails to pay any monetary penalty imposed on him under this Act, the Commission shall proceed to recover such penalty, in such manner as may be specified by the regulations." The manner is left to regulations. The Commission's regulations on recovery are not among the sources consulted, so we state no procedure for recovery. The overview of the Commission's 2024 General Regulations is in our article on those regulations; later amendments should be checked.
Section 39(2): "In a case where the Commission is of the opinion that it would be expedient to recover the penalty imposed under this Act in accordance with the provisions of the Income-tax Act, 1961 (43 of 1961), it may make a reference to this effect to the concerned income-tax authority under that Act for recovery of the penalty as tax due under the said Act."
Section 39(3): where a reference has been made under sub-section (2), the person upon whom the penalty has been imposed "shall be deemed to be the assessee in default under the Income Tax Act, 1961 (43 of 1961)", and the provisions in sections 221 to 227, 228A, 229, 231 and 232 of that Act and the Second Schedule to that Act and any rules made under it apply, so far as may be, as if those provisions were provisions of the Competition Act and referred to sums by way of penalty imposed under the Competition Act instead of to income-tax and sums imposed by way of penalty, fine and interest under the Income-tax Act, and to the Commission instead of the Assessing Officer.
The Income-tax Act, 1961 and the section numbers are quoted as printed; check the current tax law for the corresponding provisions. We do not explain any tax provision here; see our income-tax guides.
The three Explanations to Section 39
- Explanation 1: any reference to sub-section (2) or sub-section (6) of section 220 of the Income-tax Act, 1961 (43 of 1961), in those provisions or the rules is construed as a reference to sections 43 to 45 of the Competition Act.
- Explanation 2: the Tax Recovery Commissioner and the Tax Recovery Officer referred to in the Income-tax Act are deemed to be the same for recovery of sums imposed by way of penalty under the Competition Act, and a reference made by the Commission under sub-section (2) "would amount to drawing of a certificate by the Tax Recovery Officer as far as demand relating to penalty under this Act".
- Explanation 3: any reference to appeal in Chapter XVIID and the Second Schedule to the Income-tax Act is construed as a reference to an appeal "before the Competition Appellate Tribunal under section 53B of this Act".
A naming point in Explanation 3
Explanation 3 still prints "the Competition Appellate Tribunal", whereas Section 53A(1), as printed, names the National Company Law Appellate Tribunal as the Appellate Tribunal for the purposes of the Act. We quote both as printed. Section 2(ba) is not printed in the body of the consolidated text, as our article on Section 1 and the terms that name the Commission explains. The appeal provisions are in our article on the Appellate Tribunal.
What penalties can be recovered
The penalties are those imposed under the Act, for instance after an inquiry under Section 27 (see our article on orders and penalty after inquiry) or under Sections 43 to 45, which Explanation 1 expressly names. A short overview of penalties is in the guide on penalties under the Competition Act.
Section 40
Section 40 is printed as "Omitted by the Competition (Amendment) Act, 2007 (39 of 2007 with effect from 12th October 2007)". It has no article of its own and we do not describe what it said.
What changed in 2023
| Section | Before | After |
|---|---|---|
| 38 | Rectification of a mistake apparent from the record; no change to substantive part | Not changed |
| 39(1) to (3) and Explanations | Recovery by regulations or through the income-tax authority | Not changed |
| 40 | Omitted in 2007 | Not changed |
Need help with an order that has a mistake or a penalty demand?
If an order of the Commission seems to contain an error, or a penalty is due and you are unsure how recovery would proceed, our team can read Sections 38 and 39 with you. Speak to us about legal dispute resolution and bring the order.
Key takeaways
- The Commission may amend an order to rectify a mistake apparent from the record, on its own motion or when a party brings it to notice.
- It may not amend the substantive part of the order while doing so.
- If a monetary penalty is unpaid, the Commission proceeds to recover it in the manner specified by regulations, or refers it to the income-tax authority.
- On such a reference the person is deemed to be an assessee in default under the Income-tax Act, 1961 as printed.
- The 2023 Act does not amend Sections 38 or 39.
Read next
- Appearance before the Commission and its procedure
- Director General: investigation, search and seizure
- Orders and penalty after inquiry under Section 27
- Penalties under the Competition Act: cartels and abuse
Disclaimer: Based on the consolidated text of the Competition Act, 2002 published by the Competition Commission of India (amendments shown up to the Finance Act, 2017), read with the Competition (Amendment) Act, 2023 as published in the Gazette of India on 11 April 2023, and on the regulations and guidelines of the Commission as notified in 2024, as consulted on 2 October 2026. Commencement notifications, notified thresholds, rules and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.