(a)  The division of motor vehicles shall suspend or revoke a certificate of title, upon notice and reasonable opportunity to be heard in accordance with § 31-3.1-36, when authorized by any other provision of law or if it finds:

(1)  The certificate of title was fraudulently procured or erroneously issued;

(2)  The vehicle has been scrapped, dismantled or destroyed; or

(3)  Upon request of the tax administrator after notice and reasonable opportunity to be heard by the tax administrator, that the taxes specified in § 31-3.1-10(4) have not been paid.

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(b)  Suspension or revocation of a certificate of title does not, in itself, affect the validity of a security interest noted on it.

(c)  When the division of motor vehicles suspends or revokes a certificate of title, the owner or person in possession of it shall, immediately upon receiving notice of the suspension or revocation, mail or deliver the certificate to the division of motor vehicles.

(d)  The division of motor vehicles may seize and impound any certificate of title which has been suspended or revoked.