When dd was in primary we signed up to the school music service keyboard lessons, naively thinking they would be in addition to her lessons (perhaps at lunch-time/break) but like you, found they were taken during normal lesson time. I was not amused, I can tell you, especially as, after two years she'd hardly advanced (and neither had any others!). We also found she was horrid to the children (I thought it was just my dd who'd taken a dislike to her, it turned out she liked to shout at all of them - it was a group lesson too!).
She was a peripatetic teacher, with luck your ds's will be too
Anyhow, we had to give notice to County Hall, but can't remember if it was a half-term or full term's notice though.
If I were you I'd just explain (if you HAVE to face the teacher) that you weren't aware it would be during normal lesson time and you're not happy with that. There's no reason why the teacher will stop your ds from taking part in all other music activities, it makes no difference to the teacher I expect.
Do check your paper-work, I'm sure it will tell you all about it.
By the way, we then got dd a proper piano teacher who's fantastic (I know 'cos I've started learning too) and dd is flying now! - whereas I just break out in laughter at my efforts all the time