You said you are showing data in another gridview which is not present in update panel right?
dropdownlist is in update panel so you can not update controls which are not present in update panel with dropdownlist events
Try to learn Jquery.
you can retrieve html data from server in asynchronous requests.
If you want to learn follow this links
Step into Jquery.you can get best experience with Jquery in webapplications
coming to you question ...
you said by removing update panel it was working.
The reason is just In said before.you can achieve this without full page refreshing using only with Jquery.
All the Best