itc on restaurant business - Goods and Services Tax - GST

dear sir/madam my client is engaged in the business of Hotel and restaurant business under same GSTN, for the restaurant business client has opted regular basis, client has charges 5% GST on the restaurant business and not taken any ITC as the same is not allowed, however client has utilized credit balance of ITC of hotel business with output liability on restaurant business, officials suggested that you should have pay tax on restaurant business on cash payment basis and availment of credit balance of ITC is not as per law, please suggest and also provide supporting. Thanks