Try something like this:
var products = db.tbl_ProductTbls.AsQueryable();
if (drpProdType.SelectedValue != "3")
{
products = products.Where(l => l.tbl_ProductType.Type == drpProdType.SelectedItem.Text || l.tbl_ProductType.Type.Equals(string.Empty));
}
var prodList = products.ToList();