In Skanda Puran, Maheshwar Khand, It discribed about how Papanashan Shivalingam came into existence.
Goddess Durga’s Visit to Parvati after killing Mahishasur
Goddess Durga after killing Mahishasur she went to the place where goddess Parvati was still doing her penance. Goddess Durga held Mahishasur’s head in one hand and a sword in the other.Goddess Parvati saw Durga coming and told that ‘O Vindhyavasini! You have accomplished an impossible act. If it were not for you I would not have been able to accomplish my own penance. Now, you should get rid of this skull and create a holy spring bathing in which would destroy your sin acquired by killing Mahishasur.’
Goddess Durga gets rid of her sin for killing Mahishasur
Goddess Durga hit ferociously at a huge rock breaking it into pieces. A large pit was created which was soon filled up with underground water. She then took her bath in it by chanting NAMAH SHONADRINATHAY.
Emergence of Papanashan Lingam
In the meantime, an amazing incident took place. While goddess Durga was taking her bath with Mahishasur’s skull in her hand, a Shivalingam , which was struck in Mahishasur’s throat fell down. This Shivalingam later on became famous as ‘Papanashan Shivalingam’. She then released the skull and came out from the pond. Arunachaleshwar (Lord Shiva) became pleased by Parvati’s devotion and appeared before her. Lord Arunachaleshwar then made Parvati to sit by his left side. The next moment Parvati’s identity mingled with that of Lord Arunachaleshwar. The place where this incident took place, there is situated a grand temple of goddess Apitastani and Lord Arunachaleshwar.