Malthouse told reporters on Wednesday that Garlett, who has last played senior football for the Blues in round 12, had been in Carlton's round 20 team as of Monday morning, but now would not play as punishment for his late night out.
Malthouse stressed Garlett had been the victim in the brawl that occurred in Melbourne's Lonsdale Street at about 5am last Sunday, but said in being out that late Garlett was not displaying the discipline he expected of his players.
The Blues coach said he had not consulted the Blues' leadership group before deciding to leave Garlett out of this round's team.
"I like to think I treat all my players as adults and therefore if you treat them like adults you'd like them to act like adults, but I'm also very aware … there's no good time after 1am," Malthouse said.
"Whatever time it was it was too late and (Garlett was) clearly in the wrong area.
"Jeff will be made very, very aware of that and has been made aware of that.
"Jeff hasn't got enough points up as far as I'm concerned to walk into the side, albeit that he's a victim.
"We've got a lot of young players here who have got to know right from wrong."
It is understood Garlett is not facing any criminal charges over Sunday's incident, while no other Carlton players were involved.
Malthouse said Carlton would support Garlett in the aftermath of Sunday's incident, which left the forward with a head laceration that required stitches.
The coach also said the incident would have no bearing on the long-term future of the small forward, who comes out of contract at the end of this season.
However, Malthouse made it clear he expected more of an experienced player, especially at a time when Carlton is carrying a long injury list.
"When you're playing seconds … our expectations are high – not low, not medium – that we expect him to be pushing for senior selection in the right manner," Malthouse said.
Garlett has kicked just 12 goals in nine senior games in 2014 after leading the Blues' goalkicking with 43 last season.
Malthouse also announced on Wednesday that Irish international rookie Ciaran Sheehan would make his debut for the Blues against Gold Coast this Saturday.
"I think it's a fantastic story. He actually came over with Zac Tuohy (in 2009) and went back (to Ireland) and has come back again and I think that that's meritorious," Malthouse said.
The Blues coach said the strongly built Sheehan, 23, could play in attack, defence or on a wing and had earned his call-up with consistently good VFL form.
Veteran Chris Judd is likely to play against Gold Coast after recovering well from an ankle injury suffered against Fremantle last Thursday night.
Judd trained with Carlton's rehab group prior to the Blues' main training session on Wednesday, with Malthouse saying the two-time Brownlow medallist had later told him his ankle was fine.
