The decision was taken by the home department following a recommendation by the Law department on the matter, said an official.
The former Mayawati-led government had slapped three cases -- in Barabanki, Mau and Pratapgarh -- against Dutt in 2009 for his alleged comments.
On Aug 1, 2009, Dutt had reportedly told a gathering in Pratapgarh that he would like to give a 'jaadu ki jhappi' to then chief minister Mayawati.
He repeated the dialogue from his "Munnabhai MBBS" film in Dakshin Tola in Mau and at Ram Sanehi Ghat in Barabanki.
Following this, three cases were lodged against the film star in these three places. Sanjay Dutt was then general secretary with the Samajwadi Party but left the party after close friend and senior SP leader Amar Singh was shown the door.