Preheat oven to 350 degrees F.
In a small pot heat milk and butter with salt and pepper, to taste, over low heat. Bring to a simmer.
Layer the sliced potatoes into a 9-inch pie plate or scallop potato dish. Add hot milk and butter. Top with cheese and bake for 30 minutes.
Preheat oven to 400 degrees F. Place a baking sheet in the oven to preheat.
Using the slicing attachment on a food processor or a knife, slice the potatoes into thin discs about 1/4-inch thick. Place 1/3 of the sliced potatoes into a container with cold water and reserve. Place remaining 2/3 of the potatoes in a large bowl with 2 teaspoons canola oil, salt and pepper, to taste, and toss to coat. Remove the baking sheet from the oven and spray with nonstick cooking spray. Transfer the potatoes to the baking sheet and bake for 10 minutes, flip each chip and bake for another 10 minutes.
In a medium pot heat 3 cups of canola oil to 360 degrees F.
In a large bowl combine remaining dry ingredients except 1/2 cup flour and season with salt and pepper. Whisk in the seltzer water.
Place the remaining 1/2 cup flour on a plate or pie dish and season with salt and pepper. Dredge the tilapia in the flour, shake off excess, then dip into batter. Carefully place the battered fish into the hot oil. Working in batches so not to crowd the pot, fry for 6 minutes until golden brown. Remove to an oven-proof plate lined with papers towels or a brown paper bag. Repeat with remaining fillets. While frying remaining tilapia keep the cooked fillets warm in a preheated 250 degree F oven.
Serve immediately with chips and tartar sauce on the side.
For Tartar Sauce:
Combine in all ingredients in a small bowl and mix until well blended.