Heat a tbsp of oil in a non stick pan, add chopped onions and fry until they turn slight golden brown in color.
Next, add whole garlic and ginger and fry for a couple of minutes. Now add grated dry coconut and fry for 3 - 4 mins until it turns brown. Keep stirring to ensure the mix is not burnt.
Add chopped tomatoes, coriander and cumin powder and fry until the tomatoes get mashed and form a mushy paste. Cool the mixture completely and grind to a very smooth paste. Reserve 2 tbsp of this mixture to prepare Usal.
Heat 2 tbsp oil in a kadai and add ground paste and fry again for 2 - 3 mins. Now, add 3/4 tsp red chili powder, turmeric powder, Goda masala and salt and fry for another 3 - 4 mins.
Add 3 cups of water and bring to boil. Simmer for 10 mins or until the oil starts floating on top.
Add chopped coriander leaves at the end.
To get that special effect on top, in a separate small pan, heat 1 tsp oil and add 1/4 tsp Red chili powder and sugar and remove it from heat immediately and add this to the kat/tarri gravy, do not mix it.
I am told this gives the authentic look of oily layer on top and so I didn’t skip this step.