2.6.2 The server shall then project the ball near vertically upwards, without imparting spin, so that it rises at least 16cm (6.3 inches) after leaving the palm of the free hand and then falls without touching anything before being struck. In the Laws of Table Tennis, Law 2.6.3 states:
2.6.3 As the ball is falling the server shall strike it so that it touches first his court and then, after passing over or around the net assembly, touches directly the receiver's court; in doubles, the ball shall touch successively the right half court of server and receiver.
I have bolded the parts of Law 2.6.2 and 2.6.3 that are of interest here, which relate to the fact that the ball must be allowed to start falling before it can be struck. The accompanying diagram illustrates this type of illegal serve, where the ball has been hit while it is still rising.
It can be difficult for an umpire to tell if a ball has been struck just before it has stopped rising, or if it has been struck at its peak. In this case, the umpire should warn the server that he must allow the ball to fall, and if the server once again hits the ball so that the umpire is not sure if the ball has started falling, the umpire should call a fault. This is according to Laws 18.104.22.168 and 22.214.171.124, which state:
126.96.36.199 If the umpire is doubtful of the legality of a service he may, on the first occasion in a match, declare a let and warn the server.
188.8.131.52 Any subsequent service of doubtful legality of that player or his doubles partner will result in a point to the receiver.
Remember, he umpire does not have to warn a player before calling a fault. This is only done where the umpire is doubtful about the legality of the serve. If the umpire is sure the serve is a fault, he is supposed to call a fault straight away. This is according to Law 184.108.40.206, which states:
220.127.116.11 Whenever there is a clear failure to comply with the requirements for a good service, no warning shall be given and the receiver shall score a point.