Labor has accused the immigration minister, Scott Morrison, of placing himself above the parliament and the high court as he pursues a new method of denying refugees permanent protection visas.

The criticism came as refugee advocates expressed concern about the fate of asylum seekers who may be returned to Sri Lanka, with the Tamil Refugee Council saying it had spoken with relatives of people on board one of the vessels who had previously been imprisoned and tortured in that country.

Guardian Australia reported on Thursday the government would try to use a new “national interest test” to deny permanent protection visas to refugees who had arrived “illegally” by boat or plane, in an attempt to circumvent its loss in the high court last month and implement its policy to refuse permanent settlement to all boat arrivals.

The opposition’s immigration spokesman, Richard Marles, said Labor did not support use of the national interest test in this way, arguing Morrison was “tying himself in knots” and throwing out “the humanitarian handbook in order to protect his political scoreboard”.

“This is a minister who has placed himself above the parliament, above the high court, he certainly places himself above the Australian people in not giving people information and for him Australia’s institutions, our legal system, our parliamentary democracy, is a mere afterthought,” Marles said on Friday.

Morrison will personally decide the new “national interest test” on a case-by-case basis, taking into account conditions such as whether the granting of a permanent visa would “provide a product for people smugglers to market now or in the future” and “erode the community’s confidence in the effective and orderly management of Australia’s migration program”.

The government argues the minister has the power to make these case-by-case decisions because the Migration Regulations 1994 say permanent protection visas should only be granted if it is in the national interest.

An information sheet distributed to stakeholders says applicants who are not granted a permanent visa will not be able to challenge the decision at the Refugee Review Tribunal. The government intends to issue temporary visas instead.

Refugee lawyers have already alerted the high court to the possibility the government was planning to unlawfully breach the earlier ruling. The court struck down Morrison’s imposition of a cap on the number of permanent protection visas issued to asylum seekers already in Australia.

The lawyer who brought that successful high court challenge, David Manne, said the court required the government to make a decision on the application of his client, a 16-year-old unaccompanied minor. Manne said the immigration department had notified him the minister was proposing to refuse the visa under the national interest test.

“We are submitting to the government that it would be unlawful for the minister to refuse our client’s application for a permanent protection visa on national interest grounds and it would be a failure to lawfully comply with the orders of the high court in the recent successful challenge,” said Manne, the executive director of the Refugee and Immigration Legal Centre.

“The government will have 14 days from today to make a decision on our client’s protection visa application and then if the minister refuses the protection visa we intend to bring this back to the high court.”

The legal dispute over protection visas comes amid confusion surrounding the fate of two vessels of asylum seekers believed to have been intercepted by Australian personnel near Christmas Island and the Cocos Islands.

The United Nations refugee agency on Thursday night expressed “profound concern” about reports about Australia’s handling of the boats and the possibility of people being returned to Sri Lanka. The UNHCR said in a statement: “International law prescribes that no individual can be returned involuntarily to a country in which he or she has a well-founded fear of persecution.”

The Tamil Refugee Council said it had spoken with a relative of one of the asylum seekers on board the vessel from India. The relative reported that several people had previously been jailed and tortured in Sri Lanka.

Council spokesman Aran Mylvaganam said the relative had told him one of the people on board had previously been beaten with a plastic pipe filled with sand and hung from the ceiling by his thumbs.

“This man told me he knows 11 people on this particular boat who had been arrested by Sri Lanka’s intelligence forces and had been tortured, having been accused of being members of the Tamil Tigers,” he said.

“The man I spoke to today told me he received a call from one of his relatives on the boat last Thursday to say the boat was having trouble with the diesel oil. They spoke only briefly and he has heard no more.”

Marles said if anybody was returned to a position of not being safe “then Australia would have squarely breached our international obligations”.

“At the heart of our international obligations is a commitment of non-refoulement,” he said.

“What danger people face in returning home to Sri Lanka is going to depend on their circumstances, on their individuals stories, and of course that is why people need to be individually assessed to see what obligations and the strength in which they invoke Australia’s obligations, that’s why there needs to be a process of individual assessment.”

Marles added that the Australian public had a right to know about the fate of the asylum seekers on board, and it was “not a matter of mere curiosity”.

“Ultimately the government are responsible to the Australian people and the briefing that this minister should be giving is not to me or to any other politicians, it’s to the Australian people,” he said.

Fairfax Media reported this week that the asylum seekers were screened and questioned on board Australian customs vessels, in a marked departure from previous screening policies. Guardian Australia reported on Wednesday that the department had previously considered a similar policy in 2012, but did not implement it because of fears it could be unlawful.

The federal government continues to refuse to confirm or deny whether the boats even exist, in accordance with its policy surrounding information on asylum seeker vessels.

The prime minister, Tony Abbott, and Morrison said on Thursday the government was acting in accordance with international law. The Coalition campaigned on a pledge to “stop the boats”.