Bring a large pot of water to a boil. Add the spinach and blanch for 1-2 minutes until wilted.
Drain the spinach and put it in a bowl of ice cold water. This helps the spinach leaves to retain their green color.
To a blender, add the blanched spinach, ½ cup of water and puree until smooth. Keep it aside.
Heat oil in a kadai. Once the oil is hot, add cumin seeds, and let them splutter.
Then add onions, and saute until the onions turn light brown.
Add minced ginger, garlic, green chili, and saute until the raw smell of ginger and garlic disappears.
Next, add diced tomato (or tomato puree), and saute till the tomatoes are soft and mushy.
Then add spices like red chili powder, turmeric powder, coriander powder, salt, and sugar. Cook for 1-2 minutes till the masalas are cooked well.
Add the spinach puree and simmer for 1-2 minutes. Do not cook for longer at this stage as the spinach can loose its color. If the gravy is thick you can add some water.
Lastly, add kasuri methi, garam masala, and paneer cubes. Give a quick stir and turn off the stove. Optionally use can add 2 tablespoons of fresh cream or cashew cream at this stage.
Delicious palak paneer is ready.