Resuming at the overnight score of 140 for three, the hosts were cruising along comfortably with Mathews (102) and Lahiru Thirimanne (62) adding 127 runs for the fourth wicket before losing seven wickets for a mere 65 runs on an engrossing third day's play.
The hosts were bowled out for 306 shortly after the tea break with leg-spinner Amit Mishra being the pick of the bowlers with figures of 4/43 in 21 overs.
India lost first innings centurion KL Rahul (2) in the very first over being bowled by Dhamika Prasad but Murali Vijay (39 batting) and Ajinkya Rahane (28 batting) ensured that there were no further setbacks by taking the score to 70 for one and extending the overall lead to 157 runs.
The highlight of the third day's play was Mathews' fifth Test hundred as he gave ample display of his batting class and showed that he is ready to take over the mantle of their top batsman from the retiring legend Kumar Sangakkara.
had 12 boundaries in all.
With two full days left, India will push for a series levelling win by setting a big target for the hosts on a tricky fifth day P Sara Oval track.
The track which has already shown signs of wear and tear with the spinners getting enough turn to make batting difficult on the final two days.
The first session belonged to Sri Lanka as they went into lunch at 224 for three with Mathews batting on 72 and Thirimanne was undefeated on 57.
But it was Ishant Sharma, who turned the complexion of the game with his post lunch spell. First he got rid of Thirimanne, caught behind off a fuller delivery. A rain break followed which must have impacted their concentration as first Test hero Dinesh Chandimal (11) fell cheaply offering a catch off Ishhant's delivery to Rahul at first slip.
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