<em>Khaak/خاک</em> is dirt, <em>sar/سَر</em> is head.

It's used when you find something about someone so disgusting, miserable, etc. that you think literally all they should be doing is this:
http://www.tarafdari.com/sites/default/files/contents/user171667/content-image/n00045274-r-b-007.jpg

E.g.
– <em>Pesaret baaz riyazi oftade./.پسرت باز ریاضی افتاده.</em> [=Your son has failed math again.]
– <em>Khaak tu saresh!/!خاک تو سرش</em>

Two other similar expressions are "<em>Che khaki tu saram konam?/چه خاکی تو سرم کنم؟</em>" and "<em>Ye khaki tu saret kon!/!یه خاکی تو سرت کن</em>" meaning something along the lines of "What the hell am I supposed to do?" and "Just do something for chrissake!" respectively.

When you do something so wrong and others wants to blame you they tell you "khak to saret"

There are many different use
More to humiliate someone