A New York State Supreme Court Judge dismissed yesterday a controversial $14 million lawsuit against Citibank by one of its former European officers.

Justice Martin Evans ruled in Manhattan that David Edwards, who had charged he was fired by the nation's largest bank only because he continued to raise allegations of overseas corporate wrongdoing to company officers, had no legal grounds for his suit.

Edwards had contended that Citibank, based in New York, was illegally evading European tax payments by shifting funds to offshore tax havens. For two years he brought up such allegations with his superiors, he said.

But Edwards was fired by the bank company in February 1978. After that, he sued, claiming he had only followed the bank's own rules of reporting alleged wrongdoing to the company, and thus was fire unfairly.

After his suit was filed, his charges gaves the public a major glimpse into the secretive world of international banking, which has since given rise to several federal investigations of bank activities.

"I am naturally disappointed in the judge's ruling," Edwards said yesterday. "The fundamental issue here is that large multinational corporations often will only be as responsive to the public interest as the people who work in them demand."

Citibank said it is "gratified" by the ruling.