If it is indeed an old 12" tool rest, it should have plenty of iron on
it if it hasn't been used really hard. I like Leo's idea of welding a
rod on it to correct. Someone around here was making tool rests with
3/8" tool steel round stock welded (underneath) at the contact point
making the actual contact area of the rest much more durable.

If you don't have access to a welder or someone that can weld for you,
if it is only 1/4" AND there is plenty of metal left on the rest
(certainly depending on its design) you could always grind off the high
spot. My 4 1/2" high speed grinder would knock that quarter off soft
iron in a real hurry. Then you could dress the ground surface off as
needed back to smooth with files and emory cloth.

But I would certainly make sure it wasn't the banjo first. If indeed
the banjo is not at right angles to the ways, you could correct the
tool rest to compensate for this. However, it would only work if all
you turned were spindle turnings. If you grind the tool rest, weld a
rod on it or anything else to make it parallel to the ways and then you
shift the toolrest to a right (or near to it) angle to the ways to go
after a bowl, your problem will be back.

Robert