Can we do Kerberose authenication using server version of SOAVirt? This would be using REST calls instead of CLI. I am thinking yes, because the kereros authenication is contained within the .tst?
Are you asking about testing an application that requires Kerberos authentication? SOAtest supports that, as you see in the HTTP authentication settings in client tools like SOAP Client, Messaging Client, and REST Client. In general, it doesn't matter if you run a tst from SOAtest Desktop or soatestcli or SOAtest server or the SOAVirt deployable war.
That being said, I haven't tried this myself and I do not see any SOAVirt war configuration options for setting the KDC server host/port and realm/domain name. Normally you set those two in the SOAtest Security Preferences like you see in SOAtest Desktop. However, I think they do the same thing as setting java system propeties "java.security.krb5.kdc" and "java.security.krb5.realm". So, possibly you can manually set those two java system properties in the startup for your servlet container or from an Extension Tool in a setup test (or something).