Blend paste: In a small blender, combine all the ingredients together. Add water and blend until you get your desired consistency. Pour into a serving bowl or clean glass jar.
Temper spices: In a small pan over medium heat with some oil, add mustard seeds. Once they start to crackle, add in all the other ingredients and cook until the urad dal is golden brown. Immediately pour the spices over the chutney, and mix well to combine.
Keep refrigerated until you want to serve it.
Notes
Roasted chana dal prevents the coconut chutney from breaking. I simply toast chana dal in a pan until lightly brown.
Keep coconut chutney in a clean container in the fridge for up to 5 days.