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: 
Which form of scalability do you mean? The scalability, that the code is maintainable and extensible in big and small projects? Then using only static-methods hurt. Do you mean performance? If instance-methods are slower (what I don't believe in this generality), then this doesn't mean they don't scale. If they need twice the time as static-methods, they need also twice much time if you call them all 10000 times. Choosing the right algorithms and data-representation decide much more about the scalability of the performance.

At last, if you think static-methods are the way to go, you should not use an object-oriented language like Java. Try C or Pascal or classic Basic-dialects.
Voted down. The OP clearly doesn't quite understand OO. An instance method doesn't take up any extra space when an instance object is created. Static methods aren't going to save you anything unless you're also avoiding creating any instances, in which case you're going so far afield from what an OO language was built for that it's sort of pointless discussion.