Mattar paneer is a vegetarian North Indian Punjabi dish consisting of peas and paneer in a tomato based sauce spiced with garam masala.
Matar Paneer is generally served with basmati jeera rice and an Indian flat bread (naan, paratha, poori, or roti depending on region). Various ingredients are also added, like potato, corn, yogurt or cream.
Mustard oil or ghee is the ideal to make dhaba style rich gravy. Frying paneer for the gravy is totally optional. Many people like fried cubes of cottage cheese in the gravy.
Frying cubes of paneer contribute to the taste or texture of the dish.