The milk, produced in October last year, was a "surplus amount" after a cut in the group's milk production quota, he said. Selling it was necessary to prevent damage to the business, he added.
"We could not provide the milk to students," Mr Amnuai said, adding: "What was I to do? We had to sell the supply before the milk expired."
The cooperative decided to sell up to 1.1 million cartons of milk in Cambodia, he said, insisting he did not violate the contract because he did not sell them domestically.
However, agriculture permanent secretary Theerapat Prayurasiddhi argued the school milk could not be sold regardless of the circumstances.
The violators will have their quota cut by 5%, he said.
The penalty looks set to lead to further conflict as Mr Amnuai said if his group's quota is reduced, he will file an appeal with a higher authority.