Upon receipt of an application for a permit to conduct a public auction under this chapter, the city clerk shall refer the same to the chief of police for investigation and report. Thereupon, the chief of police shall cause an investigation to be made of the moral character and reputation of the applicant and the person who is to conduct the sale, and, in the case of an application for a jewelry auction sale, shall determine whether the jewelry proposed to be sold at public auction is a bona fide part of the applicant’s stock in trade and not secured, purchased or brought into his place of business for or in anticipation of the proposed sale. If the investigation by the chief of police discloses that neither applicant nor any of its officers, directors or members have violated the provisions of this chapter, he shall report to the city clerk that such an application should be issued; otherwise he shall report that the application be revoked. The making of any abnormal jewelry purchase by the applicant within a period of six months prior to the application for permit under this article shall be prima facie evidence that such purchases were made for the purpose of disposing of the same at such proposed close-out jewelry public auction and shall be just cause for the denial of the permit (Ord. 353 NCS §7.0; prior code §5.20.)