I am trying to use sublimetext3 for editing html.
If I do
ul
tab, then it generates
if I do
u
What you are describing it the expected behavior for Sublime Text.
The functionality that you are looking for comes from Emmet as skuroda said. Just install it using Package Control and you should be good to go.
Note: Moved to an answer at the request of the original poster.
Perhaps the behavior you are looking for comes from the Emmet plugin