The matatus had been hired by university students to transport them to a sports event in Meru County.
He added that the punishment was unfair and unreasonable, noting that some of the vehicles were bought through bank loans.
But William Ndeto, the licensing officer, defended the action, saying that the deregistered vehicles did not have short-term licences that would allow them to ply the route.
Mr Ndeto added that the matatu crew had incited the passengers to rough up the officers.
He said the vehicles are only authorised to operate on the Nairobi-Nakuru-Nyahururu-Nyeri-Nanyuki routes.
Mr Ndeto told the tribunal that NTSA officers have a prerogative to enforce safety.
However, the tribunal found the agency's actions excessive and directed the traffic commandant to ensure the vehicles are not impounded again after being released.