Actually I just did it with incrond inotify on my server but thank you for the amazing response though!

You can create a local custom command that minifies the js/css and upload the result.
See https://winscp.net/eng/docs/guide_custom_commands_automation

I may try to write a sample code.
What tool do you use to minify the js/css?

It'd be awesome if there was an option to toggle on and off auto minify js and css files on upload.

So basically all I have to do is drag and drop the files for upload and it automatically minifies the css and js files and puts them on the server. This way the files on the server would always be minified.