Let's say the problem is to compute the capacitance of a cylindrical capacitor with a dielectric material between the plates. The capacitor is considered to be long enough to ignore end effects. The inner and outer radii are $r_i$ and $r_o$ respectively and the dielectric constant varies linearly : $\epsilon = kr$, with $r$ going from $r_i$ to $r_o$ and $k$ is some constant that maintains dimensional consistency.
Assuming cylindrical symmetry of the electric field, we could have a volume for application of Gauss's law that is also cylindrical and has the same axis as the axis of the capacitor. Its radius is $r$ that is somewhere between $r_o$ and $r_i$. Let's say that the charge on the capacitor plates is q each.
When applying Gauss's law to this set up, should the electric flux over the cylindrical surface be equal to $q/kr_i$ or should it be equal to $q / kr$, where $r$ is the radius of the cylindrical volume being used for computation of the field.
As a broader question, when permittivity is mentioned in Gauss's law, does it mean permittivity at the boundary of the volume over which the electric field flux is being computed ?