Pressure cook toor dal until soft and mushy. Set aside.
Make Spice paste: Heat 2tsp oil in a pan, add dry red chilies, coriander seeds, chana dal, urad dal and hing. Cook till the spices are fragrant and lightly change their color. Grind into a smooth paste along with grated coconut. Set aside.
Fry the cashew nuts in 2tsp ghee and set aside for garnish.
If desired, par boil the bittergourd until tender along with some yogurt or tamarind paste. This step is not required, but if you want to expedite the cooking process do this otherwise just proceed with the recipe.
In a pan, combine bittergourd along with tamarind paste, 1cup of water, sambar powder, turmeric, salt and jaggery. Simmer on a low heat till the vegetable is tender.
Add the tomato and the ground spice paste and simmer for couple more minutes. Add the cooked dal and simmer till well blended.
In a small pan, add 1tsp oil and add the mustard seeds and curry leaves. When the mustard seeds start to splutter, add to the pitlay.
Stir in the coconut milk and turn off the pitlay. Garnish with fried cashews. Serve hot with rice.