(1) When the Registering Authority, after making such enquiry, as he may think necessary, if satisfied that the applicant has correctly given all the requisite information, paid the prescribed fee and that the application is in order, he shall register the dealer and shall issue to him a certificate of registration in Form 7 within the period specified in clause (a) of sub-section (4) of Section 17.

(2) When the Registering Authority, after making such enquiry as he thinks fit, is not satisfied about the correctness of the information furnished by the applicant, he shall, after recording the reasons there for in writing, reject the application within the period specified in clause (a) of sub section (4) of section 17. An intimation about the rejection of the application stating reasons there for shall be sent to the dealer within ten days of the date of passing of the order rejecting the application.