Young Criminal defendants who were sentenced under the federal Youth Corrections Act over the last 30 years can have their convictions removed from the public record, the U.S. Court of Appeals ruled yesterday.

The ruling was the first to interpret special provisions of the law, which allows some criminal defendants between the age of 18 and 22 to have their convictions later set aside. Thousands of people could be affected ultimately, authorities said.

Yesterday's 3-to-0 ruling was made in a case involving a law school kgraduate who had once been convicted and served a federal prison term for a marijuana offense.

He would be barred from practicing law in at least one state solely because of that past conviction. He asked for a ruling that in effect would permit him to deny he had been convicted on job or bar applications.

The appeals court panel ruled that, under the law, the law school graduate known in the suit as John Doe - and others in similar predicaments - can deny the conviction on all such forms in the future.

Lawyers involved in the case said it was unclear precisely how many defendants may be affected by yesterday's ruling. But they said that it applies only to youthful offenders who later went through a period of probation and convinced a judge that they were rehabilitated.

The law at issue has always said persons in that situation can then get the judge to issue a certificate "setting aside" the conviction and notifying the FBI that the convicton no longer was in effect.

However, U.S. District Judge Harold H. Greene, writing fro the panel, said that provision did not go far enough toward removing the "stigma" of a criminal conviction.

He said the FBI had to physically remove the conviction records from the central criminal files and could refer to them only in legitimate criminal investigations.

"The plain fact is that unless the slate is wiped clean in such a way that the FBI will not disclose, and the youthful ex-offender whose conviction was set aside may deny the existence of that previous conviction, he will almost inevitably and forever bear its stigma in terms of both social relationships in terms of both social relationships and economic opportunities," Greene wrote.

He said the effect of merely noting that a conviction was set aside is a "nicety" that employers may not take into account, and that they may refuse to take a chance on an ex-convict even if he tells them about the later action on his case.

The whole purpose of the Youth Corrections Act, Greene said, was to break the "vicious circle" whereby exconvicts cannot get jobas and must therefore return to the world of crime.

"The Youth Corrections Act was designed to break that chain, to give those young people who have not yet matured into hardened criminals an opportunity to break out into normal society, with jobs, opportunities and freedom from the stigma of a criminal record," Greene said.

Greene refused to order the lawyer's arrest record expunged, saying the Youth Corrections Act made no specific provision for such an action.

Under yesterday's ruling, an ex-offender who was sentenced under the Youth Correction Act could have his conviction removed from the public record by notifying the FBI or the court in which he was convicted. It would then be up to the bureau to set in motion the procedures to erase the conviction on the public record.

The government had argued that a notation on the public record that a person's conviction was "set aside" was enough to cure any stigma of a criminal conviction. Greene said that position was unrealistic when the act was passed, and even more so now with the capability of computer retrieval of information.

In addition, the government said the erasure of a conviction would be "rewriting history," since the conviction actually accurred.

Green said, however, that there were numerous instances in criminal and quasi-criminal contexts - such as the sealing of juvenile records - in which courts and legislative bodies have never hesitated to direct the "denial for legal puroses of events that occurred in fact."

Greene said his ruling that the government could keep the files for investigative purposes satisfied the government's claim that it needed to keep accurate and full records. He made it clear, however, that the records had to be tightly held within the law enforcement agency and not used for any other purpose.

The ruling by the U.S. appellate court was the second in a week here affecting the ability of persons to restrict official records of their arrest of or conviction from public view.

The D.C. Court of Appeals, which handles local criminal Matters, ruled last Thursday that arrest records of citizens wrongfully taken into custody can be sealed from public inspection, but not destroyed.

The John Doe in yesterday's ruling was cinvicted in federal court in Arizona in 1971, but after his release he received an A.B. degree from a "large American university, graduating Phi Beta Kappa with high honors in his major" and is a recent graduate of a "prestigious law school," the opinion said.