Last year, the Dutch embassy had issued a Schengen visa for me which is valid till the 23rd of July 2014. I wish to visit Spain from the 15th to the 30th of July. VFS, who work with the Spanish embassy, suggested I get the visa cancelled from the Dutch Embassy. But, the Dutch embassy got back to me saying that they cannot cancel a used visa and that I should apply for a visa with the Spanish embassy asking them to have the visa valid from the 24th of July 2014. Can somebody please help on what would be the best course of action in this case?
I am a bit surprised that the Dutch consulate would not cancel the visa but you can definitely apply for a new visa from the Spanish consulate and combine two visas to cover your trip. This particular scenario is even offered as an example in the Handbook for the processing of visa applications and the modification of issued visas
Example: A Moroccan lawyer representing a gender equality NGO who frequently participates in meetings in various Member States holds a multiple-entry-visa which expires on 31.5. She applies for a new visa on 15.4.
If a new visa is issued, it should be valid from 1.6. and in such a case the visa holder would be entitled to enter the territory of the Member States on the basis of the first visa that will expire during the stay and leave on the basis of the new visa.
If VFS is not willing to help, you could try to quote that and the answer from the Dutch embassy to convince them to forward your application to the Spanish consulate.