Prosecutors in the port city of Magadan had accused the chief pastor of the Word of Life Pentecostalist Church of hypnotizing congregants to extort donations.
They tried to ban the congregation under a religion law that gives courts the right to outlaw religious groups found to be inciting hatred or intolerant behavior. The law has been used against several groups recently.
Congregants said local authorities, media and private citizens had harassed them so much that more than 400 of them applied for asylum in the United States at the end of January.
However, a Magadan court ruled Monday that the prosecutors' allegations had no legal basis, said Anatoly Pchelintsev, a lawyer working with the Slavic Center for Law and Justice in Moscow, which monitors religious rights violations in Russia.
"The prosecutor's office bears responsibility for the situation that arose around this case,'' he said today.
The court also said the prosecutors had violated the congregation's rights by illegally videotaping church services and attempting to forge court documents.
The prosecutor has until next week to appeal, which is expected. If the court's decision is not reversed, the congregants are expected to withdraw their appeal for asylum in the United States.
"This decision sends a powerful message to the government. ... Just because the Russian government doesn't like the way this church practices its Christianity, it cannot legally discriminate and harass church members,'' said Jay Sekulow, an American lawyer who worked with the Russian defense team.
The style of worship varies in different Pentecostalist churches. Many worshippers exercise Holy Spirit "gifts,'' including speaking in tongues, faith healing and modern-day prophecies.
The religion law, passed in 1997, recognizes Russian Orthodox Christianity as the nation's leading faith and pledges to respect Islam, Judaism and Buddhism. But other denominations face a host of restrictions and have to prove they've had a presence in Russia for at least 15 years before they're permitted full legal status.
Human rights groups have protested Russia's religion law as a violation of the Russian Constitution, which protects the freedom of religion.