The rules and regulations promulgated by the State Tax Commission shall make suitable provisions for the use by an applicant of the duplicate copy of his application for a certificate of title to serve as a permit for the operation of the motor vehicle or the use and occupation of a manufactured home or mobile home described in the application until the commission either issues the certificate of title of such motor vehicle, manufactured home or mobile home or refuses to issue the certificate. The commission and every designated agent receiving an application for the certificate of title, when the provisions of this chapter have been otherwise complied with, shall deliver to the applicant the duplicate copy of his application which shall contain a suitable permit for the purposes mentioned in this paragraph.

In the event the commission refuses to issue the certificate of title the applicant shall, immediately upon receiving written notice from the commission that such certificate will not be issued for the reason or reasons stated in the notice, deliver or mail to the commission by registered mail the duplicate copy of his application containing the permit mentioned in the previous paragraph of this section and, in the case of a vehicle, the current privilege license tag which was issued for the vehicle. The motor vehicle, manufactured home or mobile home described in said application shall not be operated on the highways or other public places of this state or used or occupied after the applicant receives notice that the certificate will not be issued unless its operation is subsequently authorized by the commission either by the issuance of a new permit or by a certificate of title. If for any reason the said duplicate copy of the application for certificate of title and, in the case of a vehicle, the current privilege license tag which was issued for the vehicle in question is not received by the commission within ten (10) calendar days after the commission mails written notice to the applicant that it will not issue the certificate of title applied for, the commission or, at the request of the commission, any state highway patrolman, sheriff or other peace officer of this state, is authorized and empowered to require and compel the surrender of said duplicate copy of the application for certificate of title and, in the case of a vehicle, the said current privilege license tag. The commission, after it obtains possession of said duplicate copy of application for certificate of title and, in the case of a vehicle, said current privilege license tag, is authorized to retain same until it is satisfied that said applicant is entitled to receive a certificate of title of the vehicle, manufactured home or mobile home in question.