Problem Solved.
Sorry Someone already asked this issue, but no fix was provided. After a little reseach I was able to fix my problem. Since I can not delete this Post.
I'll share with you my fix.
My particular problem lies on the sip-pbx server software running with the SME. If you are using a sip-pbx with the SME then if you have an account on the SME and at the sip-pbx end, then both accounts should be delete. If you delete the SME account but leave the sip-pbx account active you won't be able to reinstate the user again as an sme user.
See you next post!