Hello Manveer,  

You will get two varieties of paneer in the market- hard and soft. Soft cheese is preferred by many. But soft cottage cheese stays fresh for less time and hard cheese remains fresh for a long.

Hard cheese is best used to make curries and vegetables. Soft paneer is greatly used to make sweets and desserts like rasgulla, ras malai, chenna murki, and much more. 

Hard cheese can be best used to cook North Indian dishes like shahi paneer, paneer tikka, Kadai paneer, and with all the curries.

Do not deep fry hard cheese. It gets harder.

So, next time whenever cheese gets harder in your refrigerator, put it in water for some time and use it.