Put enough oil in a large skillet to coat the bottom of the pan. On medium high heat sauté the garlic, ginger, and chili paste until the raw smell of garlic goes away.
Add onions and sauté for an additional 2-3 minutes until the onions are translucent. You shouldn't have any browning of the onions.
Add diced tomatoes, and cook until the excess water has cooked out oil has separated, the tomatoes should have a jammy texture. Add garam masala, lal mirch, turmeric and cashews. Empty the mixture into a bowl to cool.
Blanch the spinach by boiling water with 2 tbsp. salt put your spinach in and let it cook for 30-45 seconds then place in a medium bowl with ice water. This will preserve the wonderful green color of the spinach. Blend the blanched spinach with the cooled tomato and onion mixture.
Put enough oil to coat the bottom of the pan again. On medium high heat temper the cinnamon stick, cardamom pods, and cloves. Once the spices give off their aroma and darken, add the spinach mixture. Add 2 cups of water and reduce heat to a simmer. Simmer for 10- 15 minutes stirring occasionally.
Add paneer and cook through for an additional 5-10 minutes. This will slightly thicken the gravy as well so if it becomes too thick feel free to add in water 1/4 c. at a time until desired consistency.
Add the juice of a lemon and sugar and salt to taste. Top with kasuri methi and serve with naan or rice!