Police in the two states, both ruled by Prime Minister Narendra Modi's Hindu-nationalist party, gave oral orders in at least two districts requiring restaurants to put the names of their owners on display boards.
Police said this would help avoid disputes for thousands of Hindu pilgrims who travel on foot to sacred sites during a holy month, many of whom follow dietary restrictions, such as eating no meat during their journey.
But a Supreme Court bench ruled on Monday that while restaurants could be expected to state the type of food they serve, including whether it is vegetarian, they "must not be forced" to display the name and identities of owners.
The court suspended orders by police in Uttar Pradesh and Uttarakhand states and issued a notice to them seeking their response on petitions challenging the move.
More than a third of India's 1.4 billion people are estimated to be vegetarian - the world's largest percentage of people who don't eat meat or eggs - as they follow diets promoted by groups within Hinduism and other religions.
Some vegetarians choose not to eat in restaurants that also serve meat and don't rent out houses to meat-eating tenants.
A few allies of Modi and leaders of opposition parties had criticised the police orders, saying they feared they would deepen the communal divide and lead to Hindus avoiding restaurants employing Muslims.
Political foes accuse Modi and his Bharatiya Janata Party (BJP) of targeting India's roughly 200 million minority Muslims for electoral gains, which Modi and the BJP both deny.
"Such orders are social crimes, which want to spoil the peaceful atmosphere of harmony," opposition Samajwadi Party Chief Akhilesh Yadav had said in a post on X, criticising the police moves.
Reporting by Arpan Chaturvedi and Saurabh Sharma Writing by Shivam Patel Editing by Peter Graff
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