The high court, in its order passed on July 25, granted permission to the newly-formed BJP-led NDA government at the Centre to withdraw appeal against the high court order.
The high court had, in October 2006, discarded the findings of the Banerjee panel report and ruled that the probe was "unconstitutional, illegal and null and void" but the erstwhile UPA government had challenged it.
"The petitioner (the Union government) seeks permission to withdraw this appeal. Permission, as prayed for, is granted. The present appeal stands disposed of as withdrawn. Rule is discharged," the Gujarat High Court division bench comprising justice K S Jhaveri and justice A G Uraizee said in the order passed on July 25.
The commission had been formed by the then Union Railway Minister Lalu Prasad in 2004 to probe the Sabarmati train burning incident in which 59 persons, mostly kar sevaks, had lost their lives in 2002 in Godhra which was followed by anti-Mulsim riots in the state.
At that time, the Gujarat government-appointed Nanavati Commission was already probing the incident.
The Banerjee commission had come up with its interim report on January 17, 2005 stating that the S-6 coach burning incident was an "accident", whereas the Justice Nanavati probe panel had, in its year 2008 report, held that it was a "pre-planned conspiracy".
The commission's interim report had also cited forensic evidence stating that the injuries on the victims were only compatible with an 'internal fire'.
However, findings of the Banerjee commission were challenged before the high court by one Neelkanth Bhatia, who had sustained injuries in the train burning incident.
Bhatia had submitted in the plea that the incident cannot be probed by Banerjee panel as it had been probed by the state government-formed Nanavati commission.
Justice D N Patel of the Gujarat High Court had declared the formation of panel to be a "colourable exercise of power with mala fide intentions", and its argument of accidental fire "opposed the prima facie accepted facts on record".
The UPA government had challenged the high court decision before a division bench and the case was pending.
With the withdrawal of the appeal, Banerjee panel remains illegal as held by the high court earlier.
The train-burning incident of February 27, 2002 had triggered wide-spread communal violence across the state, in which more than one thousand persons had lost their lives.