I think you want
eval grep somestring "$VARTEST"
or even
VARTEST_EVALUATED=$(eval echo $VARTEST)
grep "$SOMESTRING" "$VARTEST_EVALUATED"
but remember (as others have already said): If possible, use
VARTEST="$TEST/foo/bar"
instead
VARTEST='$TEST/foo/bar'
use the second one only if you really need a lazy rating ...
, , $VARTEST .