Police are making enquires into the shooting in Houhora, in the Far North, after the puppy owner complained.
An SPCA spokeswoman said they were not currently investigating this incident, as police were looking into it.
"We have offered to assist police should they require our help."
Each puppy provided about $30,000 income over two years from breeding, the owner said.
"There's not a lot of work up this way so people sell fruit and vegetables or breed animals."
Yesterday morning, the puppies were sleeping in the garage when their owner lifted the garage door so the pups could have a feed and pee.
"I didn't have me gumboots on so I turn around, put me gumboots on and four of them disappeared, which I thought was pretty unusual."
He said he whistled for the puppies and spotted them running in a straight line over to the neighbour's paddock, where there was about a thousand shorn sheep.
In a distance, he said he saw two men on a hill hiding behind a tank, next to a white ute.
"They are standing there and they slowly come down the hill as if they are stalking something like hunters do in the bush.
"They get down on their belly army-style and I hear an extremely - louder than a shotgun - bang and a [whimper]."
The puppy owner said he saw the shooters running and firing one shot after another.
"I saw three little puppies, each one going in a separate direction, faster than a greyhound, I didn't know they could move that fast."
After approaching his neighbours to ask what had happened, they replied saying the puppies had killed four sheep.
"I said 'oh shit, we will pay any damages' begging and apologised.
"I'm a farmer too and if any dog attacks animals then they've got to go but what has occurred here didn't sit well with me," he said.
After taking the puppies to the vet, he said he discovered a dead sheep carcass, at least two days old, had been left in the middle of his neighbour's paddock.
He believes it was left there to attract dogs so his neighbours could shoot them.
"The carcass was a different breed of sheep than the ones that were in the paddock. Any dog would smell that. Our dogs didn't kill that sheep, their teeth are not sharp enough to go through wool," he said.
The Far North farmer said everyone he'd told about the incident had been disgusted and his wife had spent two hours last night speaking to a counsellor.
"We breed dogs for mobility, training and security and companionship. Every one we have sold so far, people are rapt in their behaviour and nature. These puppies wouldn't hurt a fly, they don't know how to kill," he said.
"I want accountability."