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I am trying to post a sales order through webservice(codeunit) from ASP.net project. It works on localhost it doesnt work on the webserver. It does not even show any exception in the try catch block. Anyone faced the same issue?? I am not sure what the issue is, any ideas??

i've had to overcome this issue a while back.

both problems may not be the same but here are some things to check.
eventually you will narrow it down.

nothing in try catch. i hate it when that happens.
double check your initialization settings on your services code
double check your credentials code (especially the DOMAIN pointer). there's more than one way to specify a domain. if the name doesn't work try the ip addy.
double check the url services pointers in web.config
double check the settings in the config file in the dynamics folder on the app server (i can't recall the name of the file right now)
make sure your ports are all opened properly 7047, 7049, etc.
make sure your webserver and the app server can talk.
--if they are on the same network then it won't be much of a problem
--if its on another network, you may have to create a trust relationship between the two networks so the credentials passed are accepted.
check the error log on the app server for failed login attempts or other errors which might point you in the right direction.
make sure your proxy credentials in sql server work outside of your project. use sql manager from your localhost to validate your credentials.
worse case scenario, download wireshark and get to sniffin some packets!

You will also need to make sure that dialogs and messages are not used. That requires a change to the standard codeunit 80.

The problem was with the service initialization. I was doing an initialization in every function within the same class. A single initialization resolved the issue. Strange but it worked!!