The ruling was given by the high court's Lucknow bench of justices Devi Prasad Singh, Ajai Lamba and Ashok Pal Singh on questions raised by a two-judge division bench on a PIL filed by Ranjana Agnihotri and five other local lawyers.
The PIL had sought a direction for quashing the order of the UP government for withdrawl of cases against people accused of terrorist activities and serial blasts.
"Prosecution under central acts cannot be withdrawn without permission of the central government," the three-judge bench said.
The bench also said that the prosecution cannot be withdrawn without assigning reason.
"If an application is moved for withdrawl from prosecution in a case relating to terrorism and waging of war against the country, specific and special reason has to be assigned," it said.
On June 7 while staying the state government's order to withdraw cases against people accused of terror activities, a division bench of justices Rajeev Sharma and Mahendra Dayal had referred the matter to a larger bench.