Acting chief judge of the High Court Jeremy Poon Shiu and Court of Appeal Vice President Johnson Lam revealed they were satisfied the government appeal was "reasonably arguable" but found that the authorities had failed to show there was a need to further suspend the lower court's declaration of unconstitutionality and refused the application.
But the judges also warned their decision "is not and should not be regarded as an encouragement or condonation for any person to cover their face" in situations previously caught by the ban, the South China Morning Post reported.
The Court of First Instance on November 18 ruled in favour of 25 pan-democrats who applied for a judicial review challenging the constitutionality of the ban on masks that was introduced by the government to quell the anti-government movement roiling the city since June.
A notice of appeal was lodged on the following working day, with the government arguing that the court should have allowed the executive branch a broader discretion over emergency laws, in its bid to reinstate the ban.
The two appellate court judges then granted an "interim temporary suspension order" and asked for further submissions before handing down their decision on Tuesday.
The Court of Appeal has set aside two days, from January 9, 2020, for the appeal to be heard.
( With inputs from IANS )