The owner was fined $AU2380 and his company, Kalaiamutham Pty Ltd received an $AU11,000 fine.
Under Australia's Food Regulation Act of 2009, it is against the law to allow pet meat, not in a sealed packet, in a premises where food is sold.
"The breach related to the fact that pet meat was found at premises where food was prepared and sold for human consumption," Mr Cowie said.
"Some of the meat was being processed by Mr Krishnasamy, however the City had no evidence that the pet meat was for consumption by customers."
Mr Krishnasamy wrote on social media the restaurant immediately changed suppliers after the health inspector's visit.
"We believe our mistake was trusting our supplier blindly [and] going ahead with the purchase back in February 2018 when there was an inspection. Since then we have immediately discontinued purchases from the supplier and have stepped up our hygiene practices," he wrote.
"We are truly grateful that no one has consumed the meat and that the inspection officers have helped us save our customers from an unpleasant experience."