The U.S. Capitol police chief, the Washington police chief and the D. C. government can be ordered to pay damages to 1,200 demonstrators arrested in 1971 in an antiwar protest on the Capitol steps, according to a U.S. Supreme Court action yesterday.

The court, in letting stand an appellate ruling against the police supervisors and the city government, refused to hear federal government arguments characterizing the case as one presenting "important questions" about federal officials' immunity from lawsuits.

That appeallate court ruling came in a case in which a jury and ordered the officials and the city to pay $12 million in damages to the demonstrators who were arrested in the May 5, 1971, protest. The amount of the damages has been overturned by the appeals court, and a new trial will be held on that issue alone.

The demonstration was one of several that occurred during Mayday week, and approximately 12,000 people were arrested over several days the many of the demonstrators openly attempted to "shut down" the nation's capital.

The police reaction to the protests prompted numerous lawsuits, and virtually all the arrests were later declared unconstitutional.

Yesterday's ruling, however, focused solely on the May 4-5 demonstration on the east steps of the Capitol, during which a group of protesters invited there by certain members of Congress were arrested.

At demonstrations at the time went, it was generally a peaceful assembly at which members of Congress spoke, the jury the original trial found. Although U.S. Capitol Police Chief James Powell testified that he helt he was confronting "an unruly, noisy, out-of-control mob," then D.C. police chief Jerry V. Wilson testifird at the trial that "it was a reasonably orderly crowd," marred by only a "few particular misbehaviors."

Powell argued at the time, and again in his effort to have the Supreme Court hear the case, that he had absolute immunity from lawsuits for actions taken while he was performing his official duties. In any event, he argued, he had a qualified immunity for actions taken in the case of the Mayday arrests.

Wilson argued, meanwhile, that the U.S. Capitol action was controlled by Powell and that Wilson's role in it was so superficial that he should not be found liable for the illegal arrests.

In asking the Supreme Court to hear the case on behalf of Powell, the solicitor general said the appellate court ruling against Powell makes the "chief law enforcement official for Congress . . . subject to substantial personal liability for his official actions taken to protect the legislature from what appeared to him to be a serious and imminent threat to its proper functioning and to its safety."

The Justice Department said Powell was reacting to a "difficult and delicate situation," and that allowing personal liability for supervisory law enforcement officials in those situations might stop officials "from taking the kind of vigorous and forthright action that effective law enforcement frequently requires."

Supervisory law enforcement oficials such as Powell "regularly are required to make major policy decisions and to exercise substantial discretion involving important issues" and should have absolute immunity from lawsuits, the Justice argument continued.

Despite the arguments by the Justice Department, the Supreme Court refused to hear the cases. Associate Justice William Rehnquist did not participate in the court's decision not to hear the case.

The ruling that the Supreme Court let stand, came in the U.S. Court of Appeals. U.S. Circuit Chief Judge J. Skelly Wright had found in the case that Powell's immunity argument "had a serendiptious quality about it."

The appellate panel pointed out that the jury found Powell had not taken adequate steps to disperse the crowd without arrest, and that he had even refused an offer to make announcements over the demonstrators' public address system that they would be arrested unless they left.

In a separate case yesterday involving governmental immunity, the Supreme Court let stand an appellate ruling that the Smithsonian Institution enjoyed an absolute immunity from lawsuits.

The same appellate ruling, involving a libel suit brought against the Smithsonian and one of its officials by a group called Expeditions Unlimited, said the Smithsonian official also would be protected by absolute immunity if he was found to be acting in his official capacity when he wrote a letter critical of the firm's underwater excavation capability.