Others have given good answers whether or not this is normal (no!), but I wanted to give an example reaction. The tone should be confident, a kind of "take it or leave it" approach (which, IMO, this is):
Hi,
I have been in the industry a number of years. I have delivered a lot of software on time and on budget. I am aware of time management and perform as you may expect from a professional.
Asking me to use tracking software gives me the impression that you do not trust me and that won't help the project for either of us. If you want, I can give some testimonials of other clients about how it's like to work with me, but using tracking software has to be a hard no for me.
Please let me know whether you want to continue with this project, [ and here something positive depending on how much you would like this project ].