What Haz said. Your finger is way wider than the fret line on a fretless. If you play on the line, you will have part of your finger on, behind and in front of the fret line.
You need to position your finger so that edge of it sits next to the line your fretting, not past it, which is what happens when playing right on the line. You will be sharp, playing right on the line, and it sounds worse the further up the neck you play. It doesnt sound so bad down at the nut end