The government missed its August 8 deadline to produce evidence, claiming that key personnel were unavailable.
The announcement that it would not present evidence then came on Tuesday.
Metgasco presented its evidence on July 28.
"We are surprised by the NSW government's decision not to submit evidence. It is especially disappointing given the government's claim a few weeks ago that our request for it to produce documents was ‘premature'," Metgasco CEO Peter Henderson said.
"The information we were seeking as part of our request to produce documents has not been provided, which is inconsistent with the government's ‘premature' claim. As a result, Metgasco will explore a range of other options to have the documents produced.
The company received a surprise suspension of its Rosella E01 well in Bentley from the NSW Office of Coal Seam Gas in May, citing an alleged failure to engage in community consultation.
Metgasco has fiercely rejected the claims, saying that activist opposition did not denote failed community engagement, as the anti-CSG protesters had no interest in consultation.
"The NSW government's suspension of Metgasco's drilling approval did significant damage to Metgasco and undermined investment confidence in the resource and infrastructure industries in NSW," Henderson said.
"The decision not to submit any witness statements justifying the suspension makes it impossible for the decision-makers to be cross-examined.
"It is important in these circumstances that the suspension decision be properly justified by government and scrutinised by the courts.
"By resisting the production of documentary evidence, government decision-making lacks transparency and further undermines investor confidence."
The company has been advised that the hearing of the court case is now more likely to be in December rather than October due to the availability of judges.
An expedited hearing is still being pursued.