The man was one of 43 asylum seekers who arrived by boat on Cape York Penninsula in January - and claimed to be feeling persecution.
Forty-two out of the group were granted temporary protection visas in March, sparking a diplomatic row with Indonesia.
The man's lawyer, David Manne, says the Department's ruling was made on the basis of politics, not on the validity of the man's claim for asylum.
“Our client recently lodged proceedings in the Federal Magistrates Court in which he alleged that there is significant evidence that there has been interference from higher up for an improper purpose - including on the basis of diplomatic relations with between Indonesia and Australia,” Mr Manne said.