Can a case be dismissed if the officer lies in a official police report ?

None of that sounds like a basis for dismissal. The conflict might, or might not, raise enough doubt as to the officer's credibility to help the defendant prevail on a motion to suppress. It is not at all clear, however, that the statements are in fact contradictory. I hope for the defendant's sake that he has something stronger than this to work with.

Smelling contraband from the vehicle will give an officer probable cause to search, as well as seeing contraband in the vehicle ( in plain view) upon approaching the vehicle to do a field interview. Whether he put none, some, or all of those details in his report, along with how he testifies on the stand, all concern the officer's credibility versus your witness' credibility. It may be worth a motion to suppress, but when it comes down to credibility, you roll the dice. Any attorney you choose should be familiar with the tendencies of the particular judge you are in front of to get a better idea of your chances of success.

Either is probable cause, so you think that your witness stating that the officer said he smelled contraband is going to help? I really think you need to talk to an attorney about your idea.