Villas-Boas' current team Tottenham Hotspurs reached the last 32 of the Europa League with a 3-1 win over Greek side Panathinaikos on Thursday.
Spurs cannot be drawn with Champions League rejects Chelsea in the next round but they could face them in the last 16, and the Portuguese coach, who won the Europa League with Porto last year believes its unfair.
"I think it's extremely unfair. The clubs that should come down are the Champions League clubs that qualify for the last 16 and then are knocked out. That's much fairer," the Daily Mirror quoted Villas-Boas, as saying.
"You can't give a bonus to teams who have failed. In the situation as it stands, teams fail in the Champions League and are promoted to the Europa League, which is a massive bonus," he added.
"This is not something which I've just invented yesterday - it's something I said in UEFA meetings when I was at Porto. It's up to them to decide, but I think it's not fair," he said.
On Wednesday, Chelsea became the first European Cup holders to be knocked out in the Champions League group stage.
Villas-Boas added: "We can't meet in the last 32, so anything can happen. Sometimes it's destiny. Hopefully if we go through, we can meet each other, obviously. They have a team that can win the trophy, so they will be up to the late stages of the competition. We hope to do so."
"If we cross, it is going to be two magnificent games, for sure. This club has great tradition in UEFA Cup [the Europa League's predecessor] and we want to do well again in it," he added. (ANI )