If PAM-1 matrix refers to time or evolutionary event for 1% change in amino acid sequence of a protein then how come there is PAM250? shouldn't PAM 100 be the highest where the two concerned sequences are 100% different
You misunderstood slightly what PAM1 means; it's actually (from Wikipedia) "1 [PAM] mutation to occur per 100 amino acids". So PAMn makes sense for any n, as in the 100 amino acids may mutate more than once each, on average.
Or if you put it in terms of PAM distance...
Is possible for two sequences to be more than 100 PAM apart? Yes: One position can mutate multiple times.
An attempted analogy: what does 600% casualty rate (for soldiers) mean? Well it means not only the original guy died, but his 5 replacements got (successively) killed as well.