Former Sen. Joseph M. Montoya (DN. M.), who gained national attention as a member of the Senate Watergate Commitee in 1973, died yesterday at Georgia University Medical Center.He was 62.

Hospital officials said death was caused by liver and kidney failure. Sen. Montoya spent 40 years in public life, including service in the New Mexico state legislature, to which he was elected at the age of 21, as lieutenant governor of his state, as a member of the House of Representatives from 1957 to 1964, and as a member of the Senate from 1964 until his defeat in a bid for a third term in 1976.

The most visible part of that career occured during the nationally televised Senate Watergate hearings, which helped lay the groundwork for the eventual resignation of Richard M. Nixon from presidency. Many observers felt the questions Sen. Montoya put to witness were repetitive and lacking in point.

Later, however, Sen. Montoya played key role in trimming the allowances paid to NIixon for his translation from president to private citizen. As a chairman of the treasury, postal service and general government subcommittee of the Senate Appropriations Committee, Sen. Montoya conducted hearings on proposals of the Ford administration that would have provided Nixon with $850,000 for office expences, including $55,000 in retirement pay, for his first year out of office.

The Montoya hearings discovered that 64 federalsemployes had been detailed to Nixon for his personal services. The subcommittee's report recommended that the transition allowances be cut to $200,000 for the first year including Nixon's retirement pay. This was done.

Sen. Montoya devoted much of his career in Congress to bettering the lot of Spanish-Americans, seeking to improve contacts between the Internal Revenue Service and public, to farm legislation, and to similar causes.

He described himself as a "poor boy from Pena Blanca," the place of his child near Albuquerque, N.M., and he spoke of the lot of people relegated to "dusty fields, overcrowded barrios and crammed tenements, where children die young and lives are stunted by an unheeding society dangling a golden dream before their eyes."

President Carter issued a statement saying that Sen. Montoya had "attained justified national recognition for his performance in the Senate at a time of a national crisis," a reference to the Watergate gearings. He said Sen. Montoya was "part of the ancient and proud Hispanic tradition of New Mexico."

Rep. Harold Runnels, the only Democrat now in the New Mexico congressional delegation, said Sen. Montoya had tried to represent all the citizens of his state and that he had "played a very important role in the political history of New Mexico during the last 42 years."

Former Sen. Sam Ervin, the North Carolina Democrat who was chairman of the Watergate committee, said SeN. Montoya understood the problems of the country and "had a deep devotion to their proper solution . . . He manifested his great judicial temperament in fairness while serving on the Senate committee which investigated Watergate."

Vice President Mondale said in a statement that Sen. Montoya's career was "marked by a profound and sincere sympathy for the plight of those burdened by property and those from minority groups who lack economic and educational opportunity."

Over the years, Sen. Montoya built up a reputation as a champion of the "Taxpayer's Bill of Rights" be enacted "Taxpayer's Bill for Rights" be enacted to help individuals in their dealings with the Internal Revenue Service. He said that some IRS agents "dont seem to understand the difference between 'persecute' and 'prosecute.'"

Through his chairmanship of the Senate subcommittee that made recommendations for the Treasury Department expenditures, he persuaded the IRS to change the manner in which it conducted audits of taxpayers' returns.

He used the same committee position to urge the government agency heads to give employment opportunities to Spanish-Americans.

In 1975, Sen. Montoya himself became the subject of an investigation. It was alleged that Donald C. Alexander, then the commissioner of the IRS, had blocked audits of the Senator's tax returns. The IRS investigated the charges.

"I'm clean," said Sen. Montoya, who was a millionaire by reason of extensive real estate and other holdings. Alexander declined to comment. That was the end of the matter.

Some observers felt that the tax affair may have played a part in Sen. Montoya's defeat in 1976 at the hands of Sen. Harrison Schmitt, a Republican and a former astronaut.