Lawyers acting for about one-third of the mostly minority ethnic Tamils on board took their case to the High Court Tuesday, arguing that a transfer would be illegal and that they should not be returned to Sri Lanka against their will.
The court has yet to decide whether there is a case to answer. But in a submission government lawyers said the boat, which was believed to have set sail from India, was intercepted outside Australian territorial waters.
Solicitor-General Justin Gleeson said this meant any claims made under the Australian Migration Act were not applicable.
But he gave an undertaking that 72 hours' notice would be given before any of the asylum-seekers, now reportedly held on a Customs boat, were handed back to Colombo.
The legal dispute, which was adjourned until Friday, came after another vessel carrying 41 people was returned to Sri Lanka on Sunday following a week of secrecy. The move came under fire from domestic rights activists as well as Amnesty International and UN agencies.
- Screenings at sea -
Critics say the asylum-seekers did not have their claims for refugee status properly assessed, with a brief screening carried out at sea via video link.
The adults among the group of 41 -- 28 men and four women -- were charged in their homeland Tuesday with trying to leave the country illegally, a crime punishable by up to two years in jail.
As anxious relatives waited outside, a court in the southern town of Galle granted bail to 27 of them while five were remanded in custody for two weeks. Nine children were discharged.
One of the detainees, Bhamith Caldera, told AFP he would "complain to the UN" over his treatment by Australian customs authorities and denied he had been screened.
"They never asked any questions. They just wanted us to go back," he said. "They treated us very badly."
Australian Human Rights Commission chief Gillian Triggs said the screening of asylum-seekers at sea appeared inadequate under international law.
The process reportedly involved a four-question interview via video link, with the applicants denied the means to challenge it.
"It sounds as though three or four or five questions are being asked by video conference, snap judgements are being made, and they're simply being returned," Triggs told ABC television.
"There is an obligation with international law to have a proper process."
The UN's refugee agency UNHCR said it was "deeply concerned" by the developments. In general, shipboard processing "would rarely afford an appropriate venue for a fair procedure".
The UN human rights office urged Australia to hold a wide-ranging judicial review of its treatment of Sri Lankan asylum-seekers.
- 'Stop our pain' -
Spokeswoman Ravina Shamdasani said the office was "deeply disturbed" by the return of the 41, given an apparent lack of adequate screening.
Amnesty International criticised the Australian government's "deeply concerning proposal to return asylum-seekers to a country where their lives may be at serious risk".
Prime Minister Tony Abbott earlier dodged questions about the case.
"What I'm focused on is stopping the boats.That is what we are absolutely and constantly focused on because as long as the boats keep coming, we will keep having deaths at sea," he said.
"I'm not going to comment on what may or may not be happening on the water, but I do want to assure everyone that what we do on the water is consistent with our legal obligations and consistent with safety at sea."
His remarks came as a relative pleaded for news of a three-year-old girl, reportedly his daughter, on the missing boat.
"I know all of them would be in very big trouble if sent back to Sri Lanka," he told the Tamil Refugee Council.
"I want to plead with the Australian minister to stop our pain and let us know what he has done with all the kids and families on the boat."
The US and European Union member states have said rights abuses against the ethnic Tamil minority in Sri Lanka have continued even after the civil war ended in 2009.