In a small pan kept over medium heat, add coconut oil. Once the oil heats up, fry byadgi chilies for approximately 15-20 seconds till they turn bright red. Remove the byadgi chili from the oil and reserve the oil for tempering. Add mustard seeds and as they start spluttering add curry leaves and urad dal and fry them for 5 seconds or so and then take the pan off heat immediately.
Grind coconut along with tamarind paste, powdered jaggery, ginger, onion and chilies and salt to a fine paste using water as needed.
Add the tempering to ground coconut paste and your chutney is ready.
Notes
If using fresh tamarind, take chunks of tamarind from the package and roll into a ball. The ball should be approximately 1/2 the size of a ping pong/table tennis ball (approximately 0.75 inches in diameter). I prefer using fresh tamarind instead of tamarind paste since the paste tends to darken the bright red color of the coconut chutney.