Roast the spices. Heat a kadai and dry roast the bydagi chillies, coriander seeds, jeera, black pepper, saunf and methi until they start to smoke.
Make the paste. Break the chillies into a blender jar. Add the roasted spices, tamarind paste, ginger garlic paste, jaggery, Kashmiri chilli powder and water. Blend to a smooth paste.
Marinate. Mix the curd with 4 tablespoons of the paste. Add the paneer, coat well and marinate for 15 minutes.
Cook the base. Heat 4 tablespoons of ghee in a pan. Add the curry leaves, onion and turmeric. Add 2 more teaspoons of the paste and salt.
Roast the paneer. Add the marinated paneer and mix well. Add 2 more tablespoons of ghee and roast until the masala coats the paneer.
Serve. Squeeze over the lemon juice and serve hot.