An Iranian citizen accused of conspiring to import and distribute heroin valued at more than $32 million denied the charges yesterday in dramatic, hour-long testimony at his trial in federal court.

Mohammed (Mike) Roshan, owner of the West End Restaurant in the District of Columbia, told a U.S. District Coury jury in Alexandria, "I am not guilty" of charges that he and another man brought the drug into the United States directly from heroin factories in Tehran.

Roshan, 34, of 5500 Friendship Blvd., Chevy Chase, said after cross-examination by prosecutor Nash W. Schott that he regularly bought and smoked opium. But Roshan repeatedly denied in heavily accented English that he had been involved with the purchase of heroin, which is desrived from opium.

"That's not true. I never had anything to do with it," Roshan said.

A codefendant with Roshan, Shahrokh Bakhtiar, 37, of 2001 Somerset St., Hyattsville, rested his case yesterday without putting on any witnesses or presenting any testimony inhis own behalf. Defense attorney Louis Koutoulakos told Judge Albert V. Bryan Jr. outside the hearing of the jury he plans to argue in closing statements today that Bakhtiar was entrapped by the government into participating in the alleged heroin operation. e

At the time of Roshan's and Bakhtiar's arrests on Feb. 6, federal officials said the almost seven pounds of heroin seized was the purest and largest quantity of heroin ever confiscated in the United States. Federal officials have said that in recent years they have become greatly concerned about the increasing amounts of heroin coming into this country.

Roshan testified yesterday that he had purchased the restaurant at 915 21st St. NW 10 months ago with $40,000 in cash he had accumulated through his savings, plus loans from his estranged wife and from Bakhtiar.

When he was seen on Nov. 2, 1979, by federal undercover drug agents giving $2,500 to Bakhtiar, he was actually repaying, at Bakhtiar's request, part of a $3,500 loan for the restaurant's purchase, he testified.

Prosectuors contend Roshan gave money to Bakhtiar because he was intimately connected with the heroin operation.

Roshan told the jury that for the sake of convenience he shared the rent on a one-room efficiency apartment at 2115 Pennsylvania Ave., near the restaurant, with Bakhtiar and a restaurant dishwasher.

Samples of heroin, triple-beam scales used for measuring heroin and two large Iranian exercise clubs with traces of heroin inside them which were seized in the apartment did not belong to him, Roshan testified.

"If I had know Bakhtiar was involved with heroin, I would have told him to go away . . . If you are caught with one gram of heroin [in Iran] you can be hanged," he told chief defense attorney Charles Work.

Roshan testified he drives a Mercedes Benz, rents an apartment in Maryland for $590 a month and did not have recepits for his business loans because that is the "Iranian custom."

He testified that last November he, Bakhtiar and a woman friend were "coming down" after smoking opium at his D.C. apartment when Bakhtiar opened a suitcase "full of money . . . $50,000 or $60,000 in cash. . . I thought [he had it] because he was a good salesman."

Bakhtiar is a part-time car salesman at Glenmont Chrysler in Wheaton.

Prosecutors contend that Bakhtiar brought heroin into this country on Feb. 1 through a Montreal airport inside two 18-inch high exercise clubs, which look like large American Bowling pins. The clubs were seized inside the apartment and tests showed traces of heroin inside them, according to testimony.

On Tuesday undercover agent Kenneth C. Feldman testified that Bakhtiar had boasted to him that he could smuggle pure heroin directly from Iran into this country because of his family's political connections. Both his father and cousin were high-ranking officials under the shah of Iran.