Yes they can hold the vehicle if they are suspicious of it's origins. I.e. Rebirthed/Stolen/Written off. Similar thing happened to a mate with his JDM DC2R, ended up giving it back to him after a few months, catch was he was never allowed to register it again.
Also, engineer's certs from interstate carry no weight here in South Australia, but the system here is a bit hit and miss as to what they pass and deny.
As for the missing VIN numbers, no idea on that one. Sounds dodgy, and I assume that's what Mooshie means by "something missing".
EDIT:
The only place to clear Defects and Interstate Vehicle Identity inspections is through the Department of Transport. These aren't private workshops, they are Government run. I doubt they think about it as a 'great way to make money'.
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