Hi Gaurav,

REST based services differ from SOAP based services, and when should you use SOAP? Representational State Transfer (REST) implements the standard HTTP/HTTPS as an interface allowing clients to obtain access to resources based on requested URIs. An example of a URI may look like this http://mydomain.com/service/method?parameter=var1&parameter=var2. It is important to note that REST based services are stateless because http/https is natively stateless. 

One of the many benefits for implementing HTTP/HTTPS as an interface is can be found in caching. Caching can be done on a web service much like caching is done on requested web pages. Caching allows for reduced web server processing and increased response times because content is already processed and stored for immediate access. Typical actions performed by REST based services include generic CRUD (Create, Read, Update, and Delete) operations and operations that do not require state.

Simple Object Access Protocol (SOAP) on the other hand uses a generic interface in order to transport messages. Unlike REST, SOAP can use HTTP/HTTPS, SMTP, JMS, or any other standard transport protocols. Furthermore, SOAP utilizes XML in the following ways:
Define a message
Defines how a message is to be processed
Defines the encoding of a message
Lays out procedure calls and responses
As REST aligns more with a Resource View, SOAP aligns more with a Method View in that business logic is exposed as methods typically through SOAP web service because they can retain state. In addition, SOAP requests are not cached therefore every request will be processed by the server.
As stated before Soap does retain state and this gives it a special advantage over REST for services that need to preform transactions where multiple calls to a service are need in order to complete a task. Additionally, SOAP is more ideal for enterprise level services that implement standard exchange formats in the form of contracts due to the fact that REST does not currently support this.
A real world example of where SOAP is preferred over REST can be seen in the banking industry where money is transferred from one account to another. SOAP would allow a bank to perform a transaction on an account and if the transaction failed, SOAP would automatically retry the transaction ensuring that the request was completed. Unfortunately, with REST, failed service calls must be handled manually by the requesting application.