(1) The prescribed authority may refuse registration of a dealer under this Act on any of the following grounds, namely:—
(a) if he has been convicted of any offence under Chapters XIV and XVI of the Indian Penal Code, 1860 or under any of the provisions of this Act or of any offence punishable under any law providing for the prevention of hoarding, smuggling or profiteering or adulteration of food, violation of foreign exchange regulations or foreign contribution regulations or the possession or sale of any narcotic drugs or psychotropic substances or corruption and two years have not elapsed since the termination of sentence imposed upon him;
(b) if he has been declared an insolvent by a Court of competent jurisdiction and has not been discharged;
(c) if his name has been removed from the register under clause (b) or clause (c) of section 6 and six months have not elapsed since the date of removal.
(2) No application for registration shall be refused unless the person applying for registration has been afforded a reasonable opportunity of being heard.