The firm, known as "Lunar Embassy", had managed to sell tracts of the moon for 298 yuan (37 US dollars) an acre (0.4 hectare) before being shut down in late October, the China Daily reported on Wednesday.
Lunar Embassy chief Li Jie took the case to Beijing's commercial watchdog, urging that the suspension of his company's license be lifted.
"There is not a law or regulation in China that prohibits the selling of land on the moon," the China Daily quoted him as saying in his application to the hearing.
The watchdog ruled otherwise.
"The selling of land on the moon by the Lunar Embassy to its clients is a kind of fraud," the watchdog said, according to the paper.
"To own a piece of land on the moon accords with no articles of national regulations and policies in China. It is nothing but a beautiful dream."
Previous reports had said each lunar title ensured property ownership for the client, including rights to use the land and minerals up to three kilometers (two miles) underground.
Thirty-four clients had bought 49 acres of land on the moon before the Lunar Embassy's license was revoked.
