A division bench of justices R K Agrawal and R S R Maurya asked the state government to file its reply and posted the matter for hearing on November 27.
The petition has been moved by two Varanasi residents Rajesh Srivastava and Nityanand Chaubey.
They have claimed that a notification has been issued on October 31, by a Special Secretary to the state government, in which it was said that cases against those named in the Varanasi blasts would be withdrawn.
The petitioners said that the ruling Samajwadi Party had made a promise to electorate, prior to the assembly polls held earlier this year, that after coming to power it would withdraw criminal cases against youths across the state who appeared to have been falsely implicated.
However, the petitioners have asserted that a distinction ought to be made "between a terrorist act and a mere criminal act".
"The explosions, that had rocked the Sankatmochan temple and the Cantonment railway station of Varanasi, were a terrorist act and a gross violation of human rights and deserve to be dealt with a heavy hand," the petitioners said.
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One of the petitioners - Chaubey - had recently filed a similar PIL challenging the state government's reported decision to withdraw cases against those named in the terrorist attack on a CRPF camp at Rampur on December 31, 20017.
Over 25 people were killed and several others injured in serial blasts in Varanasi in March 7, 2006.