King Kaz, in York Road, was previously permitted to provide “late-night refreshment” until 3am, seven days a week.
But council licensing chiefs said they had observed trading “as late as 5am on a number of occasions”.
Licensing officers from Hartlepool Borough Council also raised concerns about an alleged “unlicensed taxi driver” operating from the site.
In documents submitted ahead of a review by Hartlepool Borough Council’s Licensing Sub-Committee last week (Thursday, July 28), bosses at King Kaz insisted they had not worked “with any unlicensed taxi drivers” and that the suspect had been “barred” from the shop.
Ian Harrison, the council’s trading standards and licensing manager, claimed he had been in contact with the site since January over concerns.
His statement added CCTV monitoring of the premises this year had flagged several incidents between April 18 and May 20.
This included several dates where the same vehicle was pictured at the site, with the driver “going into the shop” and “giving lifts”, as well as several occasions in which the business stayed open past its licensed hours.
Muhammad Umar Arshad, the premises licence holder, said the shop was open late when he was away in London and workers were running it on his behalf.
Councillors heard that a number of staff involved with the opening hours breaches had been sacked and the takeaway was committed to operating under the terms of its licence.
Mr Arshad told the meeting: “I do apologise, it’s not going to happen again and I have taken steps to ensure it won’t happen again.”
Shop bosses insisted visits by the alleged unlicensed taxi driver were uninvited and that steps had been taken to prevent further visits by driver, who they added travelled to "various shops all around Hartlepool".
They also denied claims by licensing chiefs CCTV footage demonstrated a “relationship” between the shop and driver.
Following deliberations, councillors agreed to suspend King Kaz’s late-night refreshment licence for three months and to reduce its operating hours from 3am to midnight.
Under licensing rules, the business has the right to appeal the decision.