I would guess (only a guess) that when the seller was notified that the old septic system had to be converted, he was obligated to notify you. But he didn't.
You're the owner now. And if the township is requiring it, they'll look to you, not to a previous owner. (Again, this isn't legal advice.) I'm guessing a lawyer will say that you've got to do it, but that you may have recourse against the previous owner (and against the real estate agent representing the owner, if that agent was aware of the letter and the requirement). So you may be in a position where you have to do the work, then collect from the previous owner (and maybe the agent).
Meanwhile, you may be able to get the township to delay further action. Again, a lawyer can advise you. It's unlikely they'll just back off but it's possible they'll be willing to wait a while, perhaps until you can recover money from the previous owner.
Again, you need a lawyer.
Hope that helps.