I don't have a year for you and whenever that code was adopted may vary between jurisdictions as well. The quickest way would be to visit or call your local building department since they would (should) have that information. You could also ask them to provide you with a printout / statement explaining that this particular law was not enforced in 1978 and there's no requirement to perform such upgrades unless remodeling that questionable area.
It's all about interpretation of the problem: if the buyer was told by his home inspector that your garage's drywall installation violates current building code and it must be updated (because this is today's law), by showing the proof obtained from a local building department stating otherwise should clarify situation and proof him wrong.
On the other hand, either he said "it must, because it's the code" or "it should, because even it wasn't required in 1978 it will make their home safer" you may want to "balance the damage". If you really want to sell your property and this is the only problem the buyer is asking to correct, it might be worth to invest into another layer of drywall (I'm not sure where the insulation should go - cold floors above the garage?).
If you're not in a hurry and OK with waiting for another buyer (who knows what else the next inspector will bring up to the buyer's attention)... wait, just tell them you are not going to fix it because you don't have to. Each real estate transaction is different and usually very personal so it's difficult to suggest something uniform.
Please, let me know if I can be of any assistance.