Guru Gorakhnath came with 125,000 disciples and stayed with the king of Bilaspur Bilaspur, Himachal Pradesh. The king Apprised him of the Divine Magical Powers of Bal Shiva Yogi with clouds rendering him service. Gorakh nath envisioned that this divine yogi is the same Balaknath, who escaped from him at Vrindavan. He decided to test the powers of the Bal Shiva Yogi. Baba welcomed Guru Gorakh nath and his disciples. Gorakhnath asked Baba to fetch water from Mountain of Dhaulagiri, and gave a vessel to Baba. Baba accepted his request and through his powers filled the Vessel with the Water. Baba discovered some magical power in the vessel that was trying to dissuade him, but by Shiva's grace, Baba saved himself from temptation. On being ordered to serve milk to all his Devotees, Baba called on cow Sundari(Divine Cow), & gave them a fill of Appetite. Gorakhnath and his disciples were amazed. Gorakhnath was still not convinced and to prove his superiority over Baba. He took tested Baba & tossed his deer skin high in the air. The deer skin went up high, sped away higher and disappeared. He then asked Baba to bring down the deer skin for him. Baba tossed his Chimta up and it tore the deer skin, Guru Gorakhnath tossed-up, in two halves. Now Babaji asked Guru Gorakh nath to get the Chimta back, Guru Gorakhnath desperately failed to get the Chimta back.
He ordered a forceful inquisition of Baba Balak Nath. when the followeres of Gorakhnath tore Baba's earlobe to put-on the ear-ring. Milk is said to have sprinkled out instead of blood. This miracle scared Guru Gorakhnath’s disciples. At the same time, Babaji escaped their grasp and hid in a secret cave, to avoid Guru Gorakhnath. It is believed that Bhaironnath and Bhartriharinath were also disciples of Guru Gorakhnath and after this incident they paid salutations to Baba. All the disciples abandoned Guru Gorakhnath and he soon realized the eternal truths about Baba. He bowed to Baba and left with Bhaironnath. BhartriHari remained with Baba. Baba gave Bhartrihari a divine fruit and asked him to give it to one he loved the most. Bhartrihari left for Ujjain with this divine fruit. Baba then went back to Shah-Talai and met Mata Ratno.