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Difficult situation, however I can't help but notice the emissions inspection being disregarded in the discussion. The state emissions inspection is a real thing, monitored and tracked by the CBS service indicator along with a general vehicle inspection. It's not uncommon for technicians in non-smog areas to effectively 'disable' the indicator by setting the next inspection date a hundred years from now.
The CBS status is a separate scan from the stored fault code reading. For obvious reasons I can't say this was the only issue present, but a simple CBS-only scan may have in fact shown your emissions inspection due and the service advisor figured he would be doing you a favor by turning it off. It's not fair to accuse him of lying to you.
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