Without naming the university, he said Article 27 of the Constitution states that no person shall be compelled to pay any taxes, the proceeds of which are specifically appropriated in payment of expenses for the promotion or maintenance of any particular religion or religion's denomination.
He said the matter is sub-judice and if the Supreme Court delivers a "contrary" verdict then the issue will be discussed further.
"Can a university, a college or a school set up by tax payers' money make religion-based reservation? In my view it is not permissible," he said.
In April, the NDA government had refused to challenge an Allahabad High Court order denying the Aligarh Muslim University the minority status.
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Attorney General Mukul Rohatgi had made it clear in the Supreme Court that the government is convinced that the 1967 Constitution Bench judgment, which had held that AMU was not "established" by Muslims, still held sway.
"What about the victims of terror...People, soldiers...You cannot talk about human rights with AK 47s and big bombs in your hand," he said.
He also questioned the "double standards" of human rights activists who did not protest the killing of 'kar sewaks' in the 1990s.