Question: Does static methods and class are good for scalability ? I think so static class/method improves scalability of application and instance methods doesn't scales much. So is it good programming practice to write static method where ever it is possible ?

Answer: 
It depends on *WHY* the method is static. If it's static because it truly does not need context, then it will probably scale very well compared to something of similar complexity that is not static because it requires context.

However, if it is static merely because you cannot retain the needed context and must still pass it in, or because of some artificial goal of having more static methods, then I would suspect that it will actually scale LESS than the comparable method as non-static.

In fact I think that ASP Classic proved this point.
No static methods don't intrinsically scale better. Infact the programming style (imperative or object oriented) does not really make any difference to scaling whatsoever. There are two major aspects of scaling and what to do to improve scale depends on which we mean:

1 Scaling by number of requests a second handled

This type of scaling is normally about adding more computers to a cluster to improve overall throughput of the system. Increasing scaling is often about initially reducing the amount of shared resources used through the use of caches and then later making the data access split into shards.

2 Data Scaling

This is when the system gets more and more data over time and operations that access the data (search, filtering etc) get slower as the algorithms are more complex than O(1). In this case the normal strategy is to increase the number of read and write points and use parallel algorithms such as Map/Reduce.

But neither of these aspects has anything to do with whether you use static methods or not, just whether multiple requests work on large sets of data or single sources of data.