Dear Manan,

Remember that the pulses presented on the pins you are talking about have nearly same pulse width as your clock that is 4MHz. What istrument do you use to detect these pulses. In one project i did some time ago I had used HTCTL2032 dual axis quad decoder interfaced to V51RD2 and used LEDs driven like this HCTL2032 -- BC557 -- LED for user indication of motion. Initially I also thought that these pins didnt work since i couldnt see the leds turning on. When i observed with lights turned off [ in dark ] and shaft rotating little faster I noticed that the LEDs do to turn on and seen pulsing when the shaft rotated but the glow was very less at higher clock frequencies due to very small pulse width. When I reduced the HCTL2032 clock frequency the led brightness too increased due to larger pulse width at low clocks. Hope this helps in case you are stuck with simillar issue.

Regards,
Prahlad Purohit