December 14, 1983

The bitter contest for control of the GAF Corporation came to a formal end yesterday with the election of a new board nominated by dissident shareholders. With a cool gesture of good will toward Samuel J. Heyman, leader of the dissident group and new chairman, Jesse Werner relinquished his position as chairman, which he had held for 18 years. The Heyman Committee for New Management inherits a struggling company consisting of two divisions, specialty chemicals and building products, plus WNCN, a small FM classical music station in New York. In a report yesterday, Mr. Werner said that the chemical business was doing well and that GAF had been offered $7 million for WNCN. GAF paid $2 million for it in 1976. ''The only business not profitable is our building products business,'' he said.

Retail sales climbed by a strong 1.9 percent last month, the Commerce Department reported today, rising to a seasonally adjusted $102.5 billion, from $100.6 billion in October. The total included record dollar sales of automobiles and gains for stores selling clothing, building supplies and food, as well as for drug and department stores and restaurants. The major categories showing declines were gasoline service stations and stores for furniture and home furnishings. 'Merriest' Season in Years Commerce Secretary Malcolm Baldrige said merchants are having their ''merriest holiday selling season in many years'' because higher income and growing confidence in the economy are bolstering consumer buying.

An article in Business Day yesterday about the Xerox Corporation misstated the basis for a contingency payment that Xerox will make in acquiring Van Kampen Merritt Inc. It is the earnings of Van Kampen Merritt.

In an effort to meet objections from the Dr Pepper Company, an investor group headed by Castle & Cooke Inc., the big West Coast food producer, last night raised its offer for Dr Pepper by $21 million, to $581 million in cash. The offer was hand delivered last night to Dr Pepper directors at their homes. The investor group, known as the DPCC Acquisition Corporation, had originally offered to pay $24 a share, or $560 million, for Dr. Pepper. but the company turned the offer down last Saturday, accepting a previous one of $22 a share, or $512.5 million, from Forstmann Little & Company, a New York investment house.

President Raul Alfonsin announced tonight that he would prosecute Argentina's former military rulers for spreading ''terror, pain and death throughout Argentine society.'' In a national television speech, Mr. Alfonsin, who was inaugurated Saturday, issued a decree to prosecute the nine generals and admirals who at different times made up the three-man junta that ruled between 1976 and 1982. They will be tried in military courts. More than 6,000 Argentines disappeared during a military campaign against leftist subversion in those years and are presumed to be dead. Hundreds more were killed outright and thousands were tortured.