The court said the ban "seriously, and clearly illegally, breached the fundamental freedoms to come and go, the freedom of beliefs and individual freedom".
The ban spread to more than a dozen coastal towns following horrific Islamic State terror attacks in Nice and Normandy last month.
A spokesperson for the League of Human Rights said the ban was a "serious and illegal attack on numerous fundamental rights".
Lawyer Patrice Spinosi told the State Council's judges: "France is afraid, but the law must not give in to this fear." The law has however been suspended.